The travel industry is sitting on a huge mound of data and factors such as supply, demand, events, all the way down to the weather has a large impact on the industry and ultimately revenue for companies in the industry. LodgIQ has built a machine-learning platform that makes sense of all this data and allows the hospitality to keep things running smooth.
LodgIQ, launched less than 2 months ago, received their first round of funding and spoke with AlleyWatch about the funding and plans for expansion.
Who were your investors and how much did you raise?
We received Seed capital of $5M from Highgate Ventures and Trilantic Capital Partners.
Tell us about your product or service.
LodgIQ is a revenue optimization platform for the travel industry, with a particular focus on hotels, resorts and other lodging categories. We apply machine learning techniques across very large data sources, such as airline capacity, events, weather and city-wide hotel demand in order to ensure our clients maximize the true demand, and revenue potential for their hotel business.
What inspired you to start the company?
We were engaged by a prominent and innovative NYC based hospitality company to evaluate and benchmark their proprietary revenue management technology against all other available systems in the market. The need for a multi-dimensional big data infrastructure, advanced machine learning algorithms and an engaging UI/UX became instantly apparent. That led to the development of our first prototype and early results have validated our vision.
How is it different?
LodgIQ is an advanced data science approach in an industry that is encumbered by legacy technology solutions, disparate data and complicated workflows. Our clients can focus on high-value business decisions, based on real-time market demand data and not last week’s spreadsheet.
What market you are targeting and how big is it?
We will target the hotel, gaming and asset management verticals and the total addressable market is in the $500M to $1B range.
What’s your business model?
It’s a software-as-a-service model, with modular pricing tiers by feature and property size.
Is the travel industry ready to take on the big data that a platform like yours can offer?
Yes absolutely. The key to this is the user experience and users being able to consume our data analytics and recommendations in a meaningful way. We deal with real-time forward-looking data and our clients have a busy hotel operation to manage, rather than building reports or other analytical views.
What was the funding process like?
We were actually funded in less than 60 days, and received inbound interest. We had already proven the results of our prototype, and our investors were able to very quickly validate our credibility and business plan.
What are the biggest challenges that you faced while raising capital?
Candidly, for us things went very smoothly. Our prototype was really well received, and we had inbound interest from our investors as they completely bought into the vision, the technology and our path to scalability.
What factors about your business led your investors to write the check?
Our investors wanted real-world proof points on system performance, usability and tangible results from a selection of hotel properties. LodgIQ showed immediate business benefits and positive revenue results during that proof of concept phase.
What are the milestones you plan to achieve in the next six months?
We will be launching four new products that serve the Hospitality, Gaming and Asset Management verticals in Hospitality. We also have aggressive growth plans and will be opening new offices in Europe and Singapore, and are building a development center in Bangalore, India. We have already secured our launch customer and will be implementing our technology at 150+ hotel properties over the next six months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Based on our experience, try to focus on being able to provide actual proof points and make sure you’ve thought through a distinct path to scalability.
Where do you see the company going now over the near term?
We are scaling our engineering and operations teams to cater for a targeted global market launch over the near term.
Where is your favorite bar in the city for an after work drink?
The Rooftop lounge at The Knickerbocker Hotel, and Vintry’s Wine & Whiskey bar on Pearl Street.
