Düsseldorf The Berlin travel platform Omio is preparing for the time after the corona crisis. To do this, the start-up has raised 100 million US dollars from existing investors Kinnevik, Temasek and Goldman Sachs and some new donors. Omio has already raised $ 400 million in capital.
According to industry estimates, the meta search engine, which was still called GoEuro when it was founded, has long been one of the so-called unicorns. These are companies that are valued at at least one billion euros.
According to financial director Jan Kemper, Omio wants to take the opportunity of the crisis to buy other travel platforms. He named North and South America and Southeast Asia as interesting regions for the company, which was once founded purely for the European market. “It’s about getting an expanded offer on the platform,” said Kemper to the Handelsblatt. The names of the new investors are not mentioned. The capital is to be brought in via a convertible bond so that the shares of the old shareholders are not initially diluted.
Omio sees itself as the leading transport booking platform in Europe for buses, trains and flights. She sells tickets and offers information about traveling. There are now many indications that the company could turn from a supposed loser in the crisis into a winner, while competitors disappear from the market. After months in which Omio only received cancellations, expansion could even proceed faster than before.
It was only in January that Omio announced that it would also include rail and bus companies in the USA and Canada. The Berlin start-up previously bought the Australian planning platform “Rome2rio”. The takeover gave Omio more information on the search behavior of people who want to find out more about travel options.
“You can’t just continue with the product from before the crisis”
Kemper told the Handelsblatt that the latest capital increase was not needed to cover the acute financial needs in the wake of the corona crisis. Among other things, Omio had to reimburse canceled trips worth a “large double-digit million amount” and partially finance them.
“With the last capital increase from 2018 we could have hibernated for another year,” said Kemper. Because the industry is still “far from the worst” in the pandemic, the fresh money contributes “to relaxation”. Omio wants to fully bring back all 350 employees who were on short-time work during the corona crisis by September 1st. The business had temporarily collapsed to almost zero.
The focus now is on the revision of the offer, said Kemper, who founded Pro Sieben Sat1 when CFO came to Omio. Since the crisis, travelers have preferred to use apps because fewer people wanted to queue at the counters or machines due to the risk of infection. Demand has shifted from planes to trains, buses and other means of transport in the countryside. Users also looked for additional information on travel warnings. “You can’t just continue with the product from before the crisis,” said Kemper.
The latest innovation is the Travelindex, which interested parties can use to find out about travel restrictions worldwide. Kemper gives examples: “Before people book with us, they now ask customer service: Can I do that at all? What happens if I enter via another country? Which hygiene regulations do I have to comply with? ”This will remain a core element for the foreseeable future.
In the further development of the offer in Germany, however, Omio sees itself held back by Deutsche Bahn. A nuisance in the corona crisis: The railway did not pass on information about the utilization of its trains. “The railway has warned in its own app: Dear customer, this train is busy at 60 percent, because of the risk of infection book the next one,” says Kemper. Omio did not receive this information in order to protect its users. “It’s no longer just about competition, but also about the common good.”
Letter of complaint to the EU Competition Commissioner
With a view to the billions in aid from the federal government, the company and other travel companies are now turning to the Vice-President of the EU Commission, Margrethe Vestager, who is also the Commissioner for Competition.
In a letter available to the Handelsblatt, members of the Allrail lobby group (Alliance of Rail New Entrants) complain: “We fear that the Covid-19 measures will only help state railways, further distort the market and irreversible growth among competitors and limit it in the long term. ”The release of funds must be linked to measures to promote competition.
With regard to Germany, the signatories write: In the course of an equity increase by the federal government at Deutsche Bahn AG, structural changes would have to be ensured. Specifically, they demand “the stimulation of a used market for railway vehicles, access to passenger information and ticket sales, or fair behavior in tendering procedures for regional trains.”
It is true that the Commission cannot decide on specific state aid. As state aid, however, the investments in the railways must be approved by the Commission, which must ensure competition in the internal market. “The situation is very serious. The opening of the market itself, which has given wings to other modes of transport, is in serious danger on the railways, ”says Allrail General Secretary Nick Brooks. Allrail is an amalgamation of young companies that see themselves as competitors of the former state railways in freight and passenger transport.
“The money that is being given out now should end up with the customer,” demands Jan Kemper. “From our point of view, this should happen as part of a better offer through stronger competition.”
Part of the lobby group Allrail are also Omio competitor FromAtoB and the Munich start-up Flix Mobility, which operates the rail competitor Flixtrain. Its co-founder André Schwämmlein had already announced in the Handelsblatt at the end of July that he would examine a lawsuit against the rail billions before the European Court of Justice. The railway could use the help of the federal government to cement the near-monopoly in long-distance passenger transport and to keep private competitors on the rails small.
The allegations against Deutsche Bahn on the part of the start-ups are not new. The Federal Cartel Office is already investigating the suspicion of abuse of market power by Deutsche Bahn. However, in the corona crisis, the German travel start-ups are intensifying their exchange with the competition authorities at EU level. In hardly any other industry have young German technology companies been able to distinguish themselves as much as in the travel industry. Now the pandemic is throwing the market upside down, thwarting its growth plans and putting its future bets at risk.
Strong demand for traffic data
Just last week, the tops of the start-ups Omio and Flixbus, together with those from GetYourGuide, Trivago and HomeToGo announced complaints to the EU about Google’s behavior. This is also about data-driven business models and the question of who is allowed to view, pass on and use which information. Flixbus boss Jochen Engert said: “At the moment we feel better understood in Brussels because Competition Commissioner Margrethe Vestager has worked deeply into the subject.”
A study by the Hans Böckler Foundation also shows great interest in traffic and real-time data. A team led by the head of the Institute for Applied Economic Research at the University of Tübingen, Bernhard Bookmann, examined the connection between the opening of government and administration and the creation of new business models. According to the municipalities surveyed, traffic data is one of the most frequently requested information.
So far, however, these inquiries have come to nothing, because the municipalities are not or cannot issue them. However, new rules for open data in Europe could change that, says co-author Michael Mangold: After the revision of the PSI directive, public companies, not only in the transport sector, are to be obliged in future to provide their data in real time. (The abbreviation PSI stands for “Re-use of Public Sector Information”, ie the re-use of information from the public sector.)
The decision must be transposed into national law at EU level by July 2021. The extent to which exemptions could be created for companies with direct competitors is still a matter of interpretation. “Such changes should be discussed publicly, but the EU law change was only noticed in professional circles, the public did not find out about it,” criticized Mangold.
From the scientist’s point of view, however, a debate is urgently needed: “The effects on the competitive position of these municipal companies have not been clarified because private companies are not obliged to provide data.”
It is unclear to Omio what this change could result in. Company founder Naren Shaam wanted to make European travel bookings much easier with the platform. But it was also a laborious process for Omio to conclude contracts with municipal transport companies for years and to integrate their data into a platform. The removal of these entry barriers and difficulties also provides the platform’s value and lead over potential new market participants.
More: Cartel complaint to the EU – German start-ups against Google.