TravelLocal EIS

Backed by Channel 4 Ventures and Gresham House: managed online marketplace for tailor-made holidays, aiming to capitalise on pent-up travel demand

With pent-up demand after two years of pandemic restrictions, leisure-seekers are looking to spend more on travel this year than pre-pandemic. The package holiday sector – estimated worth $225 billion globally — is forecast to grow 8.9% p.a. to 2026. 

Targeting more affluent travellers, TravelLocal Limited (“TL” or “the Company”) has created a global tailor-made holidays platform that connects consumers to vetted local tour operators in c.100 destinations. It has taken bookings from clients in 93 countries globally – the US is its largest origin market. Holidays are ATOL-protected and typically 15-40% less expensive than premium tours through traditional travel agents. The platform has attracted loyal, repeat customers.

TravelLocal EIS – research report – border

After securing £2 million funding from its VC backers (Active Partners and Gresham House Ventures) at the height of the pandemic, TL completed a merger with German rival Trip.Me (“TM”) in 2021. The merger expanded market coverage and increased the pre-pandemic size of the business from £4.4 million (standalone) to £23.3 million in gross booking value combined.

Now, to keep pace with demand, TL aims to raise £2.0 million, of which up to £1.5 million under EIS. Existing investor Channel 4 Ventures (“C4V”) will invest £0.5 million under an equity-for-airtime deal, subject to £1 million being raised from other investors – the balance is expected to come from existing and new investors.

Management reports TL is currently tracking ahead of its £23.5 million budgeted bookings level with bookings having exceeded pre-pandemic levels.

Predicated on raising capital, management expects bookings to grow at 90% CAGR to reach £306 million in five years’ time. Forecasts and timeframes are not guaranteed.

Based on its forecasts, TL aims to reach profitability in its next financial year (to March 2024) and is targeting mid-case returns of 9.0x, and 10.7x in an upside case (before EIS tax relief) – high risk and not guaranteed.

Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

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The deal at a glance

Type Single company EIS private offer
Stage Early-stage scale-up
Launched April 2012
Funding to date £12.7 million equity funding, including £1.5 million from Wealth Club investors
Investors Gresham House Ventures, Active Partners, and Channel 4 Ventures
Sector Travel technology
Valuation See report
Market size Tailor-made travel estimated at $12 billion and to grow 9.8% p.a. from 2022 to 2026
Business model B2C
Net revenue to date £9.8 million
Revenue model Commission
EBITDA positive from* FY24
Forecast net revenue in FY27* £59.8 million
Forecast EBITDA in FY27* £24.5 million
Target return in FY27* 9.0x mid-case / 10.7x high-case
Target IRR* 73% IRR / 81% IRR
*These are forecast and not guaranteed. Capital is at risk – you could lose the amount you invest.

Highlights

  • On-track to exceed pre-pandemic bookings in current year – not guaranteed
  • Completed merger in 2021 to enlarge business by 4x 
  • Backed through the pandemic by institutional investors Gresham House Ventures and Active Partners
  • Global customer base from US, UK and Germany; able to easily switch marketing efforts to where the demand is
  • Experienced and committed management team and advisory board
  • Pre-pandemic, the combined business was growing revenues at a CAGR of 78% 
  • Private single company offer with no diversification – high risk
  • Minimum investment £20,032.05 (415 shares)

The overview provided on this website is based on the information available in the Information Memorandum prepared by the Company and additional information and representations provided by the Management upon request. Wealth Club has reviewed the information provided but not verified or audited it. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks. This is a private early-stage single company with no diversification – high risk.

TravelLocal EISWhat does TravelLocal do?

TL, as it trades today, is the product of the merger of two managed marketplaces catering for the tailor-made travel market. 

TL was originally launched in 2016 in Bristol and most of its customers were UK-based. Trip.Me (“TM”) was launched in 2013 in Berlin and served a mainly US and German-speaking customer base (Germany, Austria and German-speaking Switzerland – “DACH”).

The two businesses merged in June 2021 and now operate, management believes, the largest English-speaking platform of its type globally. 

TL connects consumers with carefully selected, trusted LTOs (Local Tour Operators – established travel companies based in the consumer’s destination). TL acts as an agent in transactions, handling bookings and payments while owning the relationship with both the consumer and LTO.

TL customers use the platform to communicate directly with LTOs, who provide on-the-ground knowledge to help plan the trip. The LTO is able to speak to the customer, tailor the trip and take payment – all via the TL platform.

Before the pandemic, the combined business had gross bookings of £23.3 million. Based on bookings for the three months to June 2022, the current run-rate of bookings is £19.3 million and tracking ahead of the £23.5 million gross bookings forecast in FY23.

Bookings for June 2022 have exceeded the same period pre-pandemic for the combined business by 30% at £2.0 million. 

Management has informed that booking enquiries (a leading indicator) for July 2022 are 142% of pre-pandemic levels – suggesting the recovery of bookings continues at pace, not guaranteed. 

Hear it from the founders: watch the recording of a recent webinar with investors

 

Download your research report to find out more

  • What is the market opportunity?
  • What is the Company’s valuation in this round?
  • What progress has TravelLocal made since its launch in 2016?
  • How does TravelLocal intend to use the funding?
  • What are the credentials of the founders and management team?
  • What might the possible exit options be?

TravelLocal EIS – research report – border

Risks – important

This is a single company offer with no diversification. It involves investing in an early-stage, loss-making business, which is by nature high risk and prone to failure. There is a risk that the capital raised may not be sufficient to achieve the Company’s objectives. You could lose the amount you invest.

Like all investments available through Wealth Club, it is only for experienced investors happy to make their own investment decisions without advice.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment.

Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief. The value of tax benefits depends on circumstances and tax rules can change. 

Before you invest, please carefully read the Information Memorandum which contains further details on the considerable risks – alongside the Wealth Club Risks and Commitments.

Please note: Channel 4 Ventures' investment in this round is conditional on at least £1 million being raised from other investors. 

Structure and fees

Investors will pay no direct initial or ongoing charges to invest. Fundraising costs are being met by the Company. Wealth Club will be entitled to a performance fee on exit. 

Wealth Club investors will invest using a nominee structure. This service is provided by Wealth Club’s subsidiary companies Wealth Club Asset Management Limited (authorised and regulated by the FCA) and Wealth Club Nominees Limited. Wealth Club Nominees Ltd will be completing the share subscription documentation on investors' behalf.

Please refer to the Schedule of Charges for more details on charges. 

All the services Wealth Club and, where applicable, its subsidiaries provide are governed by the Terms and Conditions of the Wealth Club Services.

Our view

The management team has skilfully executed the merger with and integration of TM, a high-quality and complementary business in our view. The combined business has a diversified customer base, offers more choice of destinations than its competitors, and appears well positioned to gain market share as the sector recovers.

So far in 2022, the travel sector has performed strongly against other consumer spending pressures. TL could potentially stand to win customers from more pricey competitors, while retaining its existing resilient customer base.

Initial indications are that TL is outperforming its budgets for FY23. If the Company hits its FY23 budgets, it should be well placed to raise the institutional funding required to execute the business plan, although this is no way guaranteed and at what valuation remains to be seen.

In our view, TL could be an exciting investment opportunity underpinned by a highly experienced management team and VC backers for those happy with the significant risks – you should form your own view.

Register your interest – no obligation

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 

The details

Type
Single company
Sector
Technology
Target return
9x
Funds raised / sought
£1.5 million sought
Minimum investment
£20,032
Deadline
Subject to capacity
Last updated: 7 July 2022

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