With the new financial year craziness wearing off and we settle into our new normal, now is a good time to rethink your strategies. For this year in particular, it is essential that you do this. It is essential that small businesses are on the ball in thinking creatively. Here are some simple tips to Read More…
How I got AfterPay Ventures to invest more than $10m in my business
Andrew Paykel, founder of Play Travel
Mon 29 June 2020 - 6:34 amFeatured | Finance
Founder of Play Travel Andrew Paykel talks about his startup journey, the new partnership with Afterpay Ventures and working alongside payments giant Afterpay. It’s been a fantastic journey for Play Travel, in the 5 years since it first launched in Australia, as LayAway Travel, its attracted some major players in the industry and opened the doors for thousands of budget conscious Australian travellers.
In 2015 when I launched LayAway Travel in Australia my initial goal was to attract the interest of a major investor. With Afterpay having only just launched itself, it was 3 years before I realised what a great fit we’d be with this new company taking the payment market by storm. By then we’d had some serious interest from other travel companies, but the synergy wasn’t quite there. When we crossed paths with Afterpay in 2018 it didn’t take long for both sides to ascertain we could disrupt the travel market together.
LayAway Travel was already solving a problem for the customer, how to pay for travel without debt and without a large upfront payment, but for Afterpay customers we could solve another problem by offering a bigger basket size. With our extended instalment model (from 2 to 12 months) we could offer holidays valued at more than $1,200, which is the cap for Afterpay.
We admired Afterpay’s approach in the market, despite being a B to B business it was obvious the customer was always at the forefront of their strategy. During my time with Fisher & Paykel and then with LayAway the customer has always been at the centre of our travel offer, something we now continue to drive with Play.
At our first meeting with senior Aftepay executives it was obvious to both businesses what we could provide the Afterpay database, who were already expressing a keen interest in travel with extended instalments.
Of course, like any good business negotiations there were hurdles, we were a small start-up with all hands-on deck, they were in the midst of launching in the US and we both had to understand the potential value, risk and scalability. This was also Afterpay’s first segue into a direct retail relationship with their customer, so we agreed to embark on a trial period with a new vertical called Play.
There were a number of KPI’s we wanted to test through that trial period around the customers interaction and acceptance of longer instalment periods for travel, these gave us great insights for future development. The trial went for 9 months and was deemed a success in achieving the desired outcomes.
From there we attracted an investment from AP Ventures, an investment company 44% owned by Afterpay. This investment of +$10m enabled LayAway Travel to continue to accelerate its development in the travel payments space and subsequently we’ve merged LayAway into Play Travel. We’ve got a new brand, a new break-through site launching in October, a rapidly expanding team and a clear strategy.
Obviously, the travel industry has been hard hit by Covid-19 but we see this as an opportunity. We know from research, customers will be looking for flexible payment options and a one-stop shop for travel, we intend to be all of that and at the same time hope we can contribute to re-building the industry.
Despite what we’ve been through in 2020 Australian’s are keen to keep travelling and we expect a big surge in domestic travel once the borders open. Our flexible payment model offers interest-free instalments and a flexible cancellation policy, all of which will help to restore consumer confidence. Being able to book now for 2021 and even 2022 means customers can plan ahead and budget accordingly,.
With the financial support of AP Ventures, Afterpay’s loyal customer base, and the learnings from our 5 year journey, we’re excited about the road ahead.
Andrew Paykel is the founder of Play Travel.
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