Tourlane, the German travel startup, raises $26M led by Sequoia

The travel industry continues to gain ground, expected to break $11 trillion in revenues this year, and consumers are evolving from so-called “revenge travel” post-Covid-19, to dedicating a growing share of their budget to a wider array of experiences away from home. Add AI into the mix, and that spells a bump of investment into startups looking to disrupt the landscape with something new. 

Riding the travel train, the Berlin-based startup Tourlane — a platform that is akin to an agent, letting users plan and budget for whole trips and itineraries, bringing together flights, accommodations, activities and tickets — is announcing new funding in hopes of capitalizing on those trends, raising €25 million ($26 million) led by Sequoia Capital.

The Series D is intended as a bridge to get the company profitable, CEO and co-founder Julian Weselek told TechCrunch. It will be using the funds also to expand its tech, doubling down on AI, and potentially to expand to more origination markets beyond its current base of France and Germany.

The AI investment may be the detail that catches your eye. Weselek said that the company is going big on bringing in more generative AI around the front end of the service, providing more intuitive help to users to steer them to options for what they want. That won’t spell a full replacement of humans, he said.

“Is it possible to build the tech to give customers a fully automated offer? Yes, sure that can be done,” Weselek said in an interview. “I think the question is, if you know your marriage depends on this next holiday, do you want [that, or] to have a consultation with someone who has been in the country to make a sign off on the booking?”

It’s also making a significant bet on the back end, too, where AI will help evaluate the hundreds and thousands of permutations between flights, accommodation, cars, activities, time of year and more to maximise the chance of getting users what they want, and Tourlane more revenues, too as a result. 

The company, Weselek added, has around 500 people employees, including around 150 customer agents. He said that as a “relative number” that figure is “going down,” compared to how many customers each agent helps. “They are becoming more efficient.”

But beyond AI, perhaps equally significant will be whether Tourlane can scale. The startup is now nearly a decade old — it was founded in 2015 — and to date, it says that it’s booked trips for 100,000 individuals (each person in a booking counts as an individual). 

The number of customers served is accelerating, with Weselek saying that the last year was five times stronger than its last year before Covid-19 hit.

But relatively speaking, 100k is a tiny number. Figures from the UN estimate that the number of travellers globally totalled 790 million in the first seven months alone of 2024. 

And it’s unclear what the payoff is on the business Tourlane does do. As with traditional travel agents, Tourlane makes a commission on services that it sells, but it does not disclose how much and says the fee varies depending on different factors and partners.

Nonetheless, it’s clearly a bet that Sequoia Capital feels is worth taking. The VC becomes Tourlane’s largest outside investor with this latest round. 

“This is a unique moment in the history of travel. With AI, every traveler will have the opportunity to see the world through personalized custom travel experiences,” said Andrew Reed, the Sequoia partner who led on this investment, in a statement. “Tourlane is positioned to delight millions of travelers in the years to come.”

Sequoia is an interesting name to have on the cap table, given the success the storied VC firm has had in travel up to now. Its past investments have included Airbnb (where it was one of its earliest investors and became one of the biggest winners when it IPO’d), Skyscanner (one of Sequoia’s first investments in Europe, now part of Trip.com), Klook, and Kayak (now part of Booking), along with many other smaller startups in the space. 

Others participating in the Series D include Target Global (a new backer); Jared Smith, co-founder of Qualtrics; and HV Capital. 

While the company’s current valuation is not being disclosed, for some context, the last time the company raised money — a $20 million extension — it was at a $242 million valuation, which was flat on the valuation of the original $47 million Series C. The first tranche of that C was just months before the pandemic hit, and the second was closed in the throes of it, when Tourlane, like other travel startups, raised money to hang on until people moved around again. 

Perhaps because of the rollercoaster that Tourlane has lived through so far, or perhaps because the valuation is modest this time, too, Weselek said he does not treat that number as a focus or priority.

“Company valuations in the private market are highly volatile and strongly influenced by several external factors that we can’t control, such as the cost of capital, investment hype cycles and perceived risk levels,” he said. “What is important to us right now is the fact that we have successfully secured €25 million of funding from world class investors, which enables us to bridge the path to profitability while further investing in our product, our service and our growth. If we succeed in our ambitions, we will generate a lot of shareholder value in the years to come.”