Why The Start-Up Series’ funding gives our new business “the best chance to flourish”
After struggling to raise finance for their unique business idea, the founders of Nightly.travel found the perfect investment solution in The Start-Up Series…
Founders: Santiago Navarro and David Ferreira
Description: An accommodation booking website which enables travellers to save money by splitting their stay across two hotels
Starting a travel website: How one man’s hack became Nightly.travel
According to travel expert David Ferreira, when booking a hotel guests weigh up three criteria: quality, location and price.
Usually, the amount the customer is willing to spend stays fixed, and so travellers end up trading off between quality and their ideal location to find something that’s in their budget.
Founded by Ferreira and serial entrepreneur Santiago Navarro, Nightly.travel aims do away with this, giving consumers more quality hotel options and at much lower prices. And it’s an offering which has seen the start-up crowned The Start-Up Series’ September 2017 winner.
Founded on the unique concept of hotel switching, the platform enables travellers to “split their stay across two hotels in one city in order to save as much as 70%”.
A brand-new concept, hotel switching is Navarro’s brainchild: “I’d been using this travel hack ever since I was self-employed. Being an entrepreneur means that money is hard to come by; you realise how much effort it takes to make a pound, so spending a pound becomes tougher.
“I realised when travelling to big cities and booking travel that there were bargains to be had if you were willing to be flexible and move hotels. I was finding that I was able to stay in five-star properties at three-star prices.”
Navarro, who also co-founded flat wine bottle business Garçon Wines, took the concept to a London travel tech hackathon in the summer of 2015. His idea won an award, catalysing Navarro to start building the business in early 2016.
Having worked at drinks firm Diageo and travel giant Expedia, Ferreira joined the enterprise after meeting Navarro at an entrepreneurial event, where they bonded over a shared history in the drinks industry – and a matching interest in travel tech.
The challenge of raising finance and how The Start-Up Series offered a solution
Finance was needed to launch Nightly.travel, but as an idea-stage business, Navarro admits that securing early-stage investment was tough: “There is clearly a distinct risk aversion for investors… Most still want a guaranteed return, a certain traction.”
Ferreira agrees: “When you need funding to get that traction, it can be a little frustrating.”
Fortunately, a well-timed Google Alert brought The Start-Up Series – Startups.co.uk and Worth Capital’s monthly funding competition, awarding two start-ups per month up to £150,000 SEIS equity seed investment each – to Navarro’s attention:
The Start-Up Series competition combined what I believe to be the two most important things the business needed – money and exposure.
Navarro describes the application process, which calls for a business plan, a telephone interview and a meeting with Worth Capital, as “a process rather than an application”:
“I thought it was great. I thought the stages were very helpful, I thought the application was all very clear, it was all very exciting to go from one stage to the other.”
On the final stage, a ‘deep dive’ meeting with Worth Capital, Ferreira says: “When meeting Matt [Cushen] and Paul [Soanes] at their offices, it felt much more about them getting to know us and our vision for the business, and really feeding in some initial thoughts from them as to where we could potentially take the business.
“It felt much more like a working relationship, or the beginning of a working relationship, which I quite liked.”
What it’s really like to win The Start-Up Series competition
When they were told that they had won the £150,000 equity investment, the duo say they felt “amazing”: “We were very, very happy, and the team was very happy.”
For Navarro, the victory marks a new era for Nightly.travel: “You put in a lot of time, sweat, blood, tears and a lot of compromise on your own personal life when you’re running a project.
“Large parts of the business’ funding to date has come from myself, out of my pocket – and I’ve not got much in them – so the happiness is very hard to describe, mostly because it gives the business the best chance to flourish.”
The entrepreneur believes that the business won the UK’s largest ever seed funding competition because of three things: “we are unique, we are disruptive, we are relevant.”
How £150,000 from The Start-Up Series is supercharging Nightly.travel’s growth
Still in its early stages, the business is currently operating an MVP (minimum viable product) which “has already captured some bookings”.
But, with The Start-Up Series investment, Navarro and Ferreira will now focus on “refining our target segment, identifying the correct channels to go after them, and basically driving marketing funds to drive traffic to the website”.
To this end, the duo intends to hire PPC (Pay Per Click) and social media specialists and to invest in product development and tech to create new features.
Alongside the investment, Nightly.travel has also gained a beneficial relationship with the specialist team at Worth Capital:
“Matt has a great background in FMCG, innovation and retail – very much consumer-facing businesses – so having somebody like Matt on the board, and at his level of expertise, will help us tap into consumer insights.”
And it doesn’t stop at hotel switching. Capitalising on the growing ‘bleisure’ (business leisure) trend, where professionals tack a few days’ holiday onto their business trips, Ferreira shares a promising vision: “In the future we could actually add other forms of lodging, such as a homestay.
“For the first part of your trip you’re in a hotel in the business district, but then for the weekend you switch to a homestay because you want to be in a different neighbourhood that’s a bit hipper.”
Ultimately, though, the pair’s goal is “to make accommodation switching as big in lodging as flight connections are in air travel”. Thanks to The Start-Up Series, they’re another step closer to achieving this.