Mozio raises $750K to grow its airport transfer booking engine [UPDATED]

Mozio, a San Francisco startup that runs an airport transfer search and booking engine, has raised $750,000 in a seed round, the company said today.

Investors include BulletTime Ventures (TechStars); J.R. Johnson (Trippy.com & VirtualTourist.com); HOWZAT Partners; Bradley Schwartz; and Jeff Clarke (CEO of Eastman Kodak, formerly Orbitz chairman).

The round also includes David Bellet; Ross Weber (ClickTripz CEO); Bhanu Chopra (founder of RateGain); Startup Studio Ventures; Galvanize VC; Dan Saul (formerly, president of Smarter Travel Media); Blake Woodard (angel); and Anna Dvornikova (has invested in GetGoing and Oktogo).

There is no lead investor. But CEO and co-founder David Litwak says:

Greg Turley, founder of car rental booking engine CarTrawler, is one of our major investors in this round, and we think that is a pretty big sign of legitimacy because we are following their model, and they run the Car Rentals tab on SkyScanner etc.

The investment was via convertible debt. Terms are private. The company calls this a seed round, which was preceded by a $185,000 “friends and family round” 1.5 years ago.

Mozio is like a Kayak for ground transportation servicing major airports.

CORRECTION: This post originally said Mozio offered US search, when, in fact, it offers worldwide coverage. Sorry.

The startup was founded by Litwak and Joseph Metzinger (CTO). Says Litwak:

We’re profitable. We have some massive deals in the pipeline, and are growing at 15-20% every month.

Last August, the site had its first day with more than 1,000 unique visitors.

Q&A with CEO Litwak:

UPDATE: The interview was done by email. The Q&A originally published was not a word-for-word transcript. I revised the questions and answers, introducing errors along the way. I apologize. Below is the original wording.–Sean

What’s your main aspiration in 2014 with the funding? Hiring technical talent? Hiring on the biz dev side to meet biz dev goals? Geographic expansion?

All of the above, but we have proved out the concept and are profitable, but we are actually only 2 people still (well, we hired employee #1 yesterday so now 3).

We want to accelerate and add languages, and currencies, more providers in different geographies, add more coders to move quicker and add more bizdev people as well to close more deals.

Anyone who is interested in working for a fast growing startup as either a developer or in bizdev should reach out to me.

What about the issue of disintermediation?

There are 7,000 taxi and limo companies in the U.S. alone. Not to mention rideshare, express trains, water taxis, seaplanes, helicopters, and shared-ride shuttles.

There are still thriving middlemen in industries that are much less fragmented, so we aren’t worried about this.

CarTrawler has made it work and built a thriving business on aggregating car rental agencies, a less fragmented industry, with more technical infrastructure than ground transportation.

Greg Turley, founder of CarTrawler, believes that Mozio is best placed to manage this extremely fragmented market for large OTAs and airlines.

There are only a very few APIs that you need to connect to have insane coverage worldwide. Why would a brand choose Mozio’s meta-API over others?

First of all: we are not a meta-API. We form direct connections as well as work with intermediaries. We are agnostic about who we work with, if they have a better price, we will work with them.

If you have a data connection, we will connect to it, and your prices and commission will exist in our marketplace.

Second of all: It’s simply not true that there are only a few APIs to connect to to get worldwide coverage. Sure, you can connect to one API and get 300 locations, but they are often mediocre alternatives.

How do I know that? Because we connect with those APIs as well as go close our own deals, and not one of them is a clear winner and we refer very little business to those transportation APIs as a percentage of overall bookings.

We close individual deals that almost always beat out any national chain we have, which give our partners higher commissions.

It’s kind of like saying that “You can fly to a large portion of the world on United Airlines, why do we need Kayak or ITA Software by Google, etc.?”

As for why us? Take a look at some of the alternatives.

Sites like HolidayTaxis and ResortHoppa/A2B Transfers offer transfers from SFO, but they make you choose a “point of interest” like “Downtown San Francisco.”

45% of our searches to San Francisco fall outside “Downtown San Francisco.” 22% of our searches are from SFO to cities outside of San Francisco completely.

Many of them require you to only book to hotels: 32% of our searches are to residences.

None of them offer the option to actually enter in you address, zip code or hotel name and have it figure out what’s available, you have to pick a general area.

The few sites like Groundlink that do allow you to enter in an actual address, only offer limousines. ~80% of our transfer bookings from SFO are shared-ride shuttles.

Our marketplace model is a differentiating factor as well, instead of disguising the actual service provider (and letting you book a “mozio shuttle”), we let the brands keep their identities (You book a “Supershuttle”).

In some markets we have 2-4 shuttles and 10 limousine companies competing on price and quality. We regularly get emails asking us to lower a transportation provider’s prices because they want to undercut the competition.

This leads to margins that are higher than any of our competitors, and insane conversion rates.

This is all very similar to what CarTrawler has done for car rentals. They showed that a marketplace model with multiple options leads to higher conversions than to deal directly with Hertz and form one-off partnerships.

I think the difference is even starker in ground transportation since it’s even more fragmented, less advanced, and encompasses many more different forms of transportation.

Why is Mozio best placed to lead in this space? The margins are thin, right, so it has to be made up on volume — which means it has to scale, which begs the question why you think it’s more likely to scale than the others?

The margins actually aren’t thin, percentage-wise. Obviously a $60 limo can’t compete on ticket-size with a hotel, flight or car rental, but percentage wise we can get up to 25% commission in many cases.

The lion’s share of that commission goes to our partners.

But people forget that there are a lot of flights (SFO to LAX for instance) that are probably cheaper than your cabs to and from the airport.

The airlines that have realized this and sell ancillaries like ground transportation, like Allegiant and Spirit, are the airlines that make the most per passenger. The ones that don’t, are still making 25 cents per passenger.

As for why we are primed to scale: Most of our competitors don’t offer a full picture of the ground transportation landscape. They either focus on one slender vertical, or run on antiquated systems.

This means our conversion rates are higher, as much as twice as high, as we have something for everyone.

Higher conversion rates and higher margins means a happier airline or OTA, or more money to spend on advertising, and that is the edge we need.

We are also very technically focused. We are computer science guys, and we have tackled this part of the transportation industry by diving deep into the technical back-end systems and figuring out how to work with them.

Many people don’t realize that a good portion of ground transportation providers work via email.

We have tried to minimize this whenever possible, and built out systems to help drag our partners into the modern age, and this will allow us to scale quicker.

EARLIER:
See the Tnooz TLabs profile of Mozio from 2012

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Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.

 

Comments

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  1. Edzjus

    hm.. interesting post.. but are a lot of another great transfer providers, for example, https://www.transfers-in-europe.com , livignoskitransfers.com and much more

     
  2. Dennis Bailey

    I have learned about Mozio from your article Sean. Their Mozio’s website seems to list hotels, cars, flights as well. It might be better to focus on airport transfer as this point gets diluted in their user interface.

     
 
 

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