With pre-IPO companies having little trouble to reach a billion-dollar valuation, Sally White argues that now is the time to launch an online travel business

Not so long ago it was pure fantasy that a pre-IPO tech start-up could reach a $1 billion market value. It never happened to Google, or to Amazon, or any of the other dot.com icons. Now the list, according to Fortune magazine, is knocking on for 100 of them and travel’s contribution being at the top with Uber and Airbnb.

We are in the age of ‘unicorns’ – the term minted by the founder of seed-corn venture capitalist Palo Alto-based Cowboy Ventures, Aileen Lee, as a label for these start-ups. The qualifying number is that the valuation should top $1 billion when the sums are done for fundraisings. He was writing in a blog for Techcrunch in 2013. Since then, so many unicorns have debuted that a group name has been coined for them. Insiders refer to the herds of unicorns as ‘blessings’.

Human behaviour is curious thing, and the increasing number of ‘unicorns’ seems to have created a self-generating phenomenon! A billion seems to have become a starting point! After all, seems the view, if a start-up is going to be worth billions of dollars in a few years, why quibble over a few million on the entry price?

So, if you are thinking of starting a new online travel business, the time is now!

Who are the players? The major ones in the travel market seem to be a mixture of major private equity and venture funds, but also the online industry itself. California knows how to read its home- grown spread-sheets! Media groups are pretty active, too, according to the deals on Crunchbase.

The latter group have included India’s No.1 internet network Times Internet and Naspers of South Africa. Industry investors range from Baidu (Chinese search engine) to Google. The fund community ranges from the world’s largest, BlackRock, to the country wealth fund, the Qatar Investment Authority.  Included are: Goldman Sachs the US investment bankers, lots of hedge funds, start-up funds and angel investors (such as US-Iranian techie specialist Bobby Yardeni and Airbnb backer Alfred Lin).

The world now knows all about Uber and Airbnb but Didi Dache in China, now valued at knocking on for $9 billion, has been backed by its online peers Alibaba and Tencent among others.  

Among the online entrepreneurs you can find Jeff Bezos of Amazon and Scott Bannister, who sold his Ironport to Cisco Systems. From India, in online local start ups there are Kunal Bahl who started e-commerce business Snapdeal and regular online backer Rehan Yar Khan, a technology start-up specialist. The latter two have been big in Ola, the Indian ride-sharer.

A different example of the strong community sense online is currently being shown in Greece. Word coming out of Greece (via Techcrunch) for example, is that a number of entrepreneurs have stepped in to help newcos in the financial crisis. They are offering to act as ‘proxies’ — to cover expenses and act as a guarantor.

“We have seen a network of collaboration between our companies and have rolled in others that are suffering from the effects of the crisis – to triangulate payments and ensure that payments are executed,” Techcrunch quotes Georgios Kasselakis, a partner at the Greek investment firm Openfund, as saying.

Panos Papadopolous, BugSense’s founder, is also reported to have put out a call – this time on Facebook - to help Greek startups in a similar way. “If any Greek startups are having a problem paying for services, you can rely on us; we can act as your proxies by using our credit cards in the US to cover your expenses,” Papadopolous wrote. (Bugsense is a mobile analytics platform used by developers to improve app performance.)

Greece, being a small country, does not have a large online travel industry, but one that has succeeded is Athens-headquartered taxi app start-up Taxibeat. It raised $2m from private Greek investors a couple of years ago and has since expanded in Mexico and South America.

So, the message seems to be, if you need a business backer, try locally!