Startup pitch: Razoom, a tour aggregator, signs with Amadeus Brasil
Razoom aims to become the largest tours-and-activities aggregator in Latin America by distinguishing itself with superior supplier management tools.
The Rio de Janeiro-based startup says that it is a first mover in Brazil and Latin America. In 2014, it was accepted at 21212, the top startup accelerator in Latin America.
Razoom is now launching on the Brazilian market its first distribution partnership, with Amadeus Brasil. Razoom’s full inventory of tours and activities will be available for the 4,500 travel agencies that use Amadeus in Brazil.
The Amadeus partnership will be live by the end of September. Right now it is testing the platform with some beta agencies and after this round of tests it will launch the platform.
A Q&A with Aloisio Moraes, co-founder and CEO:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
We created Razoom with the mission to connect travelers with the best tours of their destination. We started the company in the end of 2013, with a marketplace of tours and activities in Brasil.
From 2013 until today we have learned a lot about the market.
We believe that people who live new experiences become unique and because of that we want to connect those people with the most amazing things to do and, by the other hand, we also believe that technology is the perfect way to empower local specialists (tour guides and tour operators), helping them to grow their business and being more profitable.
Size of the team, names of founders, management roles and key personnel?
We are now a team of 5 people.
Aloisio Moraes – CEO
Raphael Abreu – CTO
Raphael Faria – Product designer
And also, we have other two very talented fellows working with us:
Leonardo Atherino – Sales intern
Leonardo Camelo – Web developer
We raised a total of R$685k (something around US$205k) since we jumped on the b2b business model, in March 2014.
Estimation of market size?
The market size is estimated on USD20 billion dollars worldwide.
There are some companies trying to solve the same problem, especially in the US and in Europe. But I believe that this market is a huge one and, also, none of the other players have yet found the perfect business model — so there is a lot of room for improvement.
Moreover, we are first movers in Brazil and Latin America.
Revenue model and strategy for profitability?
We bet on a commission-based business model, selling tours through distribution partners, such as OTAs, GDSs, and affiliates (blogs and marketplaces).
We believe that partnering with others is the best way to grow, given that some key players already have huge traffic and large customer bases.
What problem does the business solve?
We are solving the distribution problem for tours and activities in Latin America, bringing to the internet the best local operators and empowering them with the right tools to manage their businesses and sell online — displayin real-time information and availability for their products.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We started as a b2c marketplace but realized that tour operators are still offline, with no tools (specially mobile tools) to manage their business and sell products online.
Every time a tour was booked through our platform, we needed to get in touch, by phone, with the tour operator, due to the long time they were taking to answer e-mails. We needed to confirm tour reservations in an analogue way.
Getting a hold of tour operators was challenging, given that many tour operators are both the owner of the company and the tour guide. They are most of the time out of the office with no information about their agenda or inventory on hand.
This is a huge problem in the tours and activities industry for Latin America and in many other regions: Most B2C marketplaces don’t have access about availability. The marketplaces sell first and verify availability later.
A related problem is that the reservation systems used by many tour operators may help them manage their businesses but don’t help them to sell via digital distribution channels.
Analyzing that, and the very expensive investment needed to buy online ads to grow traffic to a B2C marketplace, we decided to pivot to a B2B business model.
We did that in 2014, and began to get real traction.
Now, Razoom is laser-focused on becoming the largest tour aggregator in Latin America, uniting travel agencies and tour guides on our platform. We give tour operators both more opportunities to sell and tools to manage their agenda and inventory.
We believe that our management tool will be crucial and one of our competitive advantages.
We’ll also seek lots of partnerships. Having major distribution channels will attract lots of suppliers. Likewise, having a huge inventory with information in real-time about tour availability will attract major distribution channels.
Why should people or companies use the business?
We are consolidating our business in Brazil first and today we have more than 100 suppliers with more then 1,500 products (tours, activities, and transfers) available for distribution and online booking. We have suppliers on top travel destinations in Brasil with the best seller tours and also activities off the beaten track, for those who want very local experiences.
The Amadeus partnership will be live by the end of September. With that partnership our full inventory of tours and activities will be available for the 4,500 travel agencies that uses Amadeus system in Brazil.
We are also launching, next month, a partnership with hotel brands and hostels in Brazil. We will provide a platform for receptionists and concierges book tours for the hotel guests.
We are the biggest tour inventory in Brazil and we are now moving to top destination on latin America. On the distribution side, we are partnering with major online channels.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We believe that working with a mix of online strategy based on content marketing and referral; and inside sales is the perfect mix for our business.
By one hand, we are going to introduce a lot of new concepts about online business and the industry to our target audience, producing blog posts and videos; and by the other hand having a proative team to call directly to most valuable leads is a good way to keep things moving fast.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We see ourselves as the leader of the tours and activities industry on the Latin American market.
We believe that on a three-year run is the perfect timing to consolidate the business here, partnering with the best tour providers and distribution channels.
We believe that competition will be a challenge soon. Some key players are already looking to the Latin American market and we need to move fast to establish a strong business here.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
The tours and activities segment has not evolved using technology on the past years. Tour operators are mostly offline, OTAs and GDS have almost no access to content and the travel finds a lot of trouble to book for tours and activities online.
Booking tours online is very challenging because the websites that sells this kind of product have no access to the tour provider availability so they sell without knowing if the product is really available.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why?
Zappos – bottom up decision making, employees empowerment, the customer always come first and everybody needs to understand and behave like that, from the support to the engineering.
Amazon – results driven, aggressive growth strategies and innovation
Priceline – the vision of creating a “ecosystem” with very complementary products on the T&E industry, just like pieces from a puzzle that together will be an empire on the long run.
Which company would be the best fit to buy your startup?
We believe that Priceline should be a very strategic buyer for our company. We love their products and the challenges that companies like booking.com and open table had on the past seems very like ours on this early days.
Also, TripAdvisor is a great fit too, considering that they are one of the most powerful traffic engine on the industry and that they have Viator, the biggest tours and activities market place on the world.
Describe your startup in three words?
Amazing experiences online.
“We’ve spent a lot of time communicating with Razoom’s executive team in the past month and we’ve been impressed. Their executives have shown a talent at prioritizing the 20% of things that matter most to business success and putting 80% of their effort into addressing those issues.
Razoom has identified two interrelated pain points in the Latin American market for tours-and-activities.
Most B2C tour marketplaces don’t have insight into the availability of a typical tour operator’s inventory because the the typical tour operator is still using order management systems that aren’t optimized for today’s digital distribution channels.
Latin American B2C marketplaces that sell first and verify later aren’t equipped to help operators with the end-to-end issues of digital marketing.
Razoom sees an opportunity here to develop management tools that help set it apart among suppliers, while also expanding its consumer base through additional distribution deals.
Transactional consumer internet marketplaces are difficult to build. We don’t envy Razoom’s task.
But once its supply-and-demand flywheel starts turning, it could scale quickly and relatively cheaply. Hotel Urbano’s model is a relevant example here (even though it isn’t precisely the same business model).
To create value, Razoom may need to crack the code on mobile, such as by developing mobile-friendly tools for tour operators. Its mobile tools are good but could be even easier to use. The company needs to create a real distance between Razoom’s product and what other competitors might some day offer.
Razoom’s team has worked hard to receive feedback from Latin America’s best mentors. That’s good. They’ve gotten some of it already. We hope they get more, plus investment, and can add jet fuel to their engine.
We wish them luck in their Startup Brasil Demo Day this week.”
Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.