Travel startup Options Away lands $3.5 million
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Stephen J. SerioRob and Heidi Brown's company, Options Away, has raised $3.5 million from investors.
Options Away seemed like little more than a clever idea less than two years ago. But Rob and Heidi Brown's idea of combining options and airline tickets to make travel more appealing (and to make some money) is catching on.
Their Chicago company is announcing today that it has raised $3.5 million from a solid group of investors, led by OCA Ventures, along with Pritzker Group Venture Capital and San Francisco-based Thayer Ventures. Individual investors include Donald Carty, former CEO of American Airlines and board member of Virgin America and Porter Airlines, as well as Howard Tullman, CEO of tech incubator 1871.
Options Away works the same way options trading works. Users can search for flights and buy an option to purchase a ticket in the future at the price being offered now. The company charges $4 to $50 to users for that option, which is good for from 24 hours to 21 days out. Exercise the option and the ticket's yours at the original price. Options Away pockets the fee even if a user doesn't book a trip.
The couple has a background in trading. Rob Brown provided software to trading firms, while Heidi Brown traded foreign currencies. They declined to disclose revenue, but Rob Brown said transaction volume has increased tenfold in the past year. The company started its site with consumers while it lined up partners in the travel industry.
It has agreements with Expedia, Hipmunk and ticketing-software maker Sabre, which is used by more than 200,000 travel agents. Brown said he hopes to line up airline partners next.
HIGHER NUMBERS
The company, which is based at 1871 in the Merchandise Mart, has raised about $5.5 million overall. It has 15 employees and expects to have about 25 by year-end.
"We have four to five partnerships. We hope to get to 10 to 12 by the end of the year," Rob Brown said. "We've got people starting to call us now."
The long-term question is whether Options Away becomes a feature that airlines or travel companies provide to customers or more of a technology platform for selling travel services.
“It's a really interesting option, especially for price-sensitive travelers, and there are a lot of them out there,” said Douglas Quinby, an Atlanta-based analyst at researcher PhoCusWright. “It looks a bit more like an interesting and novel tuck-in rather than a huge consumer business in and of itself. But there are some super-smart people at Options Away who know that space well. What is the market opportunity or need? I don't know. No one needed Airbnb before it came along.”