Former Concur, Expedia Execs Back Business Travel AI Startup

22.08.2024 - 15:37 / skift.com / Justin Dawes

Steve Singh and a group of industry veterans are rolling out a new AI trip planner and booking agent for business travel. 

It’s called Otto, and the startup shared its plans on Thursday along with news of a $6 million seed round.

The founder and CEO is Michael Gulmann, former senior vice president of consumer products for Expedia Group, and also the former chief product officer and head of marketing for Egencia. 

Madrona Ventures led the round, with support from Direct Travel and a star lineup of travel industry veterans. 

Singh, managing partner for Madrona, led the investment from the firm and is the executive chairman of Otto. 

The angel investors include:

Singh, who founded Concur and sold it to SAP in 2014 for $8.3 billion, and a group of investors in April fully acquired Direct Travel. (Christal Bemont, the company’s new CEO, is speaking at the Skift Global Forum next month.)

Otto has been designed as a virtual travel agent for planning and booking business trips, with the ability to provide support during trips if flights or plans change. Powered by the latest generative AI models, users will be able to prompt a search with natural language. 

Much of the inventory is coming through a connection with ​​Spotnana, another Madrona-backed company with Singh as its executive chairman.

Gulmann said Otto will also be able to handle details like finding a hotel with specific amenities and within walking distance to a conference center. The tool is meant to learn and remember user data like a favorite airline, frequent flight routes, and preferred hotels.

The startup will add features for booking restaurants and more in the future, it says.

The focus is on the “unmanaged” sector of business travel — individuals, maybe small business employees, that don’t work with a contracted travel agency, Gulmann said.

“This, then, can become their pseudo [travel management company],” Gulmann said. “Otto should be able to be that cost-effective way that they can get more of that personalized service.”

The unmanaged market is worth an estimated $156 billion in the U.S., according to the startup.

“So the concept is, if we can capture even just 1% of that, it’s a $1.6 billion market with $120 million in annual revenue,” Gulmann said.

As other AI-powered planners have shown, the tech is imperfect at this point.

That’s why the team is spending the next several months working out the kinks, Gulmann said, with plans to launch a beta version of the platform in December. 

The startup has enough capital for two years of operations, Gulmann said.

Otto was born in a five-minute pitch during an internal offsite meeting for Madrona Venture Labs, the venture capital firm’s incubator program, according to a statement from Labs CEO