Employees waste tons of money through expense accounts because
there’s no incentive to book flights early, stay at a modest hotel, or
dine on the cheap. But a new startup called TravelBank can predict what
employees should be spending on trips, help them file their expenses,
and even give them cash rewards if they come in under budget.
TravelBank has raised a $10 million Series A round led by NEA and joined by Accel, and today is launching on iOS, Android,
and web. It was co-founded by Duke Chung, who previously started and
sold customer service startup Parature to Microsoft for $100 million.
“The way I look at entrepreneurship is that I like the categories
that every company must have” says Chung. “And every company needs an
expense product. It’s a basic function, and there’s huge opportunities
to create something better.”
It’s not perceived as a sexy category
TravelBank is targeting small to medium businesses that are too tiny
for its SAP-owned competitor Concur, which is designed for Fortune 5000
companies. TravelBank will be free to use at first, and though it plans
to monetize it doesn’t have definitive plans for how. Eventually, it
could charge per-seat or a percentage of savings.
“Expense management has been a very sleepy space. Maybe because it’s
boring it doesn’t attract a lot of talent or innovation. It’s not
perceived as a sexy category so there’s only a few competitors. I view
that as an opportunity” Chung tells TechCrunch.
TravelBank will be spending much of the $10 million it raised a few
months ago on marketing and sales for its newly launched apps. But it
benefits from the bottom-up distribution process popularized by Dropbox,
and the fact that it’s starting free.
Any employee can sign up and use TravelBank to submit expenses and
process their reimbursements by simply taking photos and uploading them
with the app. It integrates with popular “general ledger” business
software like QuickBooks, NetSuite, or Bill.com. TravelBank can export
expenses as PDFs for easy backwards-compatibility with some legacy
expense systems.
If users convince the rest of their company to get on TravelBank,
their employers can activate the rewards feature that estimates what
employees should pay for flights, car rentals, hotels, and meals based
on real-time price analysis. If employees are frugal, they can get a
portion of that unburnt cash as a thank you for saving their employer
money.
$1.2 trillion is spent on travel and entertainment
globally, making it the second-biggest controllable spending item for
companies behind payroll. Chung himself got fed up watching employees at
Parature overspend.
“We found that people increasingly become more excessive
when it came to business spending” Chung tells me. “When we knew all the
employees and they knew us, they were more frugal, with the startup
mentality. But as a company grows and you don’t get to know all the
employees as well, you see some breakage and it gets worse of over time
with abuse and excessive spending. There was no way to regulate that”,
so Chung says he was inspired to build TravelBank to enhance management
visibility.
Sometimes spending the big bucks to wine and dine a client
can be a smart strategy. That’s why TravelBank lets you exempt spending
on clients from your budget, which focuses on the per diem and travel
expenditures employees need to get by.
Surprisingly, Chung says TravelBank actually makes
employees more efficient. Instead of flying to New York to have a single
dinner meeting, employees end up booking breakfast, lunch, and dinner
meetings with clients. That way they can exclude those costs, come in
further under budget, and get a bigger reward while also squeezing more
value out of their trip.
TravelBank will
have to convince small businesses to ditch spreadsheets, emails, and
haphazard receipt photos for a standardized app. That will undoubtedly
be tough. But if it can address an omnipresent business problem
neglected by other enterprise developers, it could help companies apply
their capital to what matters while turning employees from selfish
spenders into thrifty team members.
