See how an industry-level subscription ecosystem can foster intra-industry collaborations than just venture capital and hardware, but also human ‘heartware’.
In the tradition of business competition, airlines, hotels, tour operators, and online travel agencies operate as separate entities, focusing on their own interests except in instances of negotiated partnerships.
Yet, in a digital-centric world plagued by sustainability priorities, labor shortages, supply chain challenges, digitalization pressures and geopolitical uncertainties, the travel and hospitality industry has to seek out more collaboration in order to benefit as a whole.
One approach to ferment such collaborations is a “corporate partners program” (CPP) that aims to offer the industry a pragmatic way to match-make businesses with thousands of startups and innovation professionals to identify pilot projects, co-investments and/or acquisitions of innovative tech solutions.
The CPP program by Velocity Ventures focuses on five technology verticals:
- Food & Beverage
- Travel Experiences
- Accommodation
- Transportation/ Mobility
- Travel Services
Operating since 2020, the program has backed startups such as Aigens, Carbon Click, Food Market Hub, Zuzu Hospitality and ZYTLYN that have collectively reached US$2.5bn Gross Merchandise Value (GMV), achieving a year-over-year growth of 74% from 2021 to 2022.
Current corporate partners include firms such as Etihad Airways, Global Hotel Alliance, Goldbell Group, Klook, Lufthansa Innovation Hub, Old Chang Kee, RB Capital and The Lo & Behold Group.
Program appeal
The CPP creates value in a variety of ways for corporate partners to:
- Access thousands of tech startups providing innovative solutions to sector-specific pain points
- Gain insights on product offerings, founders and viability studies before engaging start-ups
- Compare product solutions from different start-ups
- Keep track of innovation and disruptive trends via bespoke Velocity Ventures’ events and reports
- Co-invest with Velocity Ventures in best-of-breed startups
- Drive innovation and cultural change by engaging with startups via pilots and trials
- Create and outsourced corporate venture capital operations by allocating a separate pool of capital and retaining control on all investment decisions
- Access bespoke events to keep track of innovation and disruptive trends and work closely with selected startups to identify opportunities to replace legacy processes and close the gap for operational efficiencies
- Gain the opportunity to establish an outsourced Corporate Venture Capital (CVC) unit via a managed pool of capital
According to the firm’s Managing Partner and co-founder, Nicholas Cocks: “To drive impactful change, investments and partnerships are the twin catalysts and the invaluable ‘heartware’ much needed to help travel and hospitality corporates recalibrate in this new era of accelerated digitalization. Our corporate partners can keep their finger on the pulse of technology solutions that can help solve their specific pain points and reap the long-term benefits with potential opportunities for strategic acquisitions.”
