Hopper – a mobile-only and AI based travel booking app, co-created by previous Montreal Expedia executive – is getting a big upgrade. The venture has raised another $100 million in funding. It plans to use this money for developing Artificial Intelligence algorithms and growing its international marketing. Till now, Hopper has been installed more than 30 million times and 75 million trips have been scheduled via the app. It is on track to rake in almost $1 billion in revenue this year.
According to top company sources, Hopper’s current valuation is also rising high: around 1 Billion Canadian dollars (US $780 million). In late 2016, Hopper was worth US $300 million. During that time, it has constantly been in top-10 US travel apps, as stated in App Annie stats.
Similar to other artificial intelligence companies, Hopper is strategically not profitable yet, as it reinvests revenue to progress further, Frederic Lalonde, Hopper co-creator and CEO, claimed in an interview.
Hopper has earned a reputation by making an Artificial Intelligence (AI) platform that allows people to find trips which they might have not thought of taking before in addition to assisting them in discovering good deals. AI develops the users’ profiles and interests; then profiles are further refined when users respond to the Hopper push notifications.
“We’re able to capture our users’ intent in an unprecedented way in the industry because users start watching their trips four to five months in advance of departure,” claimed Lalonde in an e-interview. “During that period, we build a relationship through an ongoing conversation about their trip, which primarily takes place via push notifications. User intent is key to our ability to implement further algorithms based on AI.”
He further added:
“It’s similar to how Netflix will recommend a show to you based on what other viewers like you are watching,” he said. “What once was done by a human travel agent is now done through a machine that gets smarter each time an action is (or is not) taken.”
Hopper’s tremendous business growth can be credited to it’s wise decision to leverage AI. According to Lalonde, 25 percent of Hopper’s bookings are due to AI, which suggested they are trips the user didn’t initially search for. “Conversion rates on AI-based recommendation notifications are 2.6 times higher than ones for which the users explicitly searched,” were the words of Lalonde.
Currently, the travel industry is worth approximately $1.3 trillion, out of which $662 billion is of online accounts and only $264 billion is from mobile. However, Hopper with its early foundation has a good chance of becoming a giant in the online travel industry.
“Mobile travel is growing 20 percent year over year. By continuing to innovate on mobile and ultimately change the way consumers plan and book travel, we believe Hopper has a tremendous opportunity globally,” said Damien Steel, OMERS Ventures’ Managing Partner. “We’re proud to continue supporting Hopper as the company further establishes itself as the leader in mobile travel booking.”