Flocations appoints Directors with online travel and investment credentials

Flocations, a Singapore startup offering metasearch for travel packages, announced today that it has appointed Venture Republic’s Kei Shibata, GGV Capital’s Jixun Foo, and TNF Ventures’ Shirley Wong to its Board of Directors.

Kei Shibata co-founded Venture Republic, a public company in Japan that runs travel search engines Travel.jp and Hotel.jp, as well as comparison shopping engine Coneco.net. His entrepreneurial experience is an asset for Flocations, which noted that Shibata began his business by bringing offline travel agents into the online field.

Shirley Wong, meanwhile, is the founding partner of TNF Ventures, an early stage startup investment firm based in Singapore. In 1994, she co-founded Frontline Technologies, an IT consulting and services company that was listed in the Singapore Stock Exchange and later was acquired by British Telecom Global Services for a reported USD 139M.

TNF Ventures, under the Singapore government’s TIS initiative, had led a USD 570k round in the startup, which includes participation from SingTel Innov8 and angel investor Ben Ball.

Rounding up the additions is Jixun Foo, a partner at growth stage venture capital firm GGV Capital and an investor of Qunar.com, a prominent online directory for Chinese travelers.

Kei and Shirley have joined the company as Directors, while Jixun is serving as Advisor to the Board.

Flocations says that in June this year, it has achieved more than SGD 1.5M (USD 1.17M) worth of sales leads for local travel agencies, with a 10 percent conversion rate. Assuming a 10 percent commission per transaction, that would work out to a monthly revenue of USD 11.7k — which is modest but understandable considering it pivoted from flight search only in April 2013.

According to co-founder Florian Cornu, the company reoriented due to the low airline commissions, which are typically below 5 percent, as well as the difficulty and high cost of obtaining airline inventory. This explains Google’s purchase of travel information business ITA Software for USD 700M.

“The travel packages space is still wide open to grab. With higher margins and a business blue ocean… the choice was easy to update our product to what it is today,” he said.

While margins for hotel packages are not exactly stunning, the business model is a straightforward volume game with a strong emphasis on SEO and SEM. The low cost of the model will mean the potential for strong competition, since incumbents could potentially replicate the model using their existing inventory.

Already, Flocations is not the only company with this business model in Asia: Singapore’s Tripzilla and SingTel’s inSing have similar offerings. In terms of sheer comprehensiveness, Flocations has some catching up to do with around 2,400 tour packages versus Tripzilla’s 3,681 for its Singapore site.

Tripzilla, which has raised SGD 250k (USD 198k) from Crystal Horse Investments, is also leading in terms of regional expansion, having launched its Malaysian site.

With inSing lagging far behind in the game inventory-wise, a future SingTel acquisition of either companies might not be a far-fetched notion.