Arcube

Unlocking travel loyalty & revenue with passenger intelligence.

Author

Quick Pitch
November 14, 2024

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Today’s feature of Quick Pitch is an early-stage start up unlocking travel loyalty & revenue with passenger intelligence.

The Market

  • Currently, 94% of airline passengers don’t choose a flight based on loyalty initiatives because loyalty points are not effective or personalised. The total spent on ancillaries every year is $212.3bn and growing at 15% CAGR. The problem is, ancillaries like priority boarding and car hire etc, aren’t smart due to limited customer data intelligence.

This week's business solves two major problems: 

  • Customers aren’t offered personalised rewards and therefore only 6% of flights are booked from loyalty leading to increased CAC for every customer.

  • Points are valueless to a lot of passengers as a result of standardised communication after every flight, disconnecting the customer.

One Liner

Arcube is the Passenger Intelligence Platform for Travel Providers.

  • Arcube uses airline data (customer travel history, point transactions etc) combined with market factors such as delays or security wait times all though custom built AI.

  • Arcube refines 600+ available and currently valueless ancillaries into 5-10 that matter providing personalised upsells through end-to-end customer journey tracking.

Quickfire

  • Headquarters: Manchester, UK

  • Employee count: 5

  • Investors: 3 airlines and other travel tech angels & VC’s.

  • Funding amount: Raising $1.5m with ~70% committed. See Arcube investment memo here.

  • Business model: 4-10% transaction fee on ancillaries sold.

  • Traction metrics:

    • Bootstrapped to $625k revenue (6-figure profit).

    • Pilot program with Etihad Airways of 1,300 passengers spent 16.5m miles on personalised ancillaries.

    • Etihad generated $1.6m in additional revenue from only 1300 passengers also increasing AOV by 10.3%.

    • 14 airlines interested in purchasing Arcube’s full-scale product ($23.5m in ARR pipeline).

    • Partnerships with 3 key distributers: Collinson Group, Visa & Flight Directors (scaling opportunities to 30+ airlines).

Due Diligence

APPEALS

  • Very large TAM: Arcube applies to the whole travel industry with a total travel ancillary revenue of $13.2bn.

  • Largest ancillary data set: Large moat being the first to market with a ‘post-flight’ solution garnering valuable ancillary trends and sales data.

  • Pipeline potential: Converting all 14 direct airlines in the pipeline will generate $23.5m ARR with a potential to hit $1bn+ ARR with just airlines alone.

POTENTIAL RISKS

  • Slow sales cycles with airlines: Initial interest to conversion for a potential airline customer is generally longer than other industries. Pipeline needs to be constantly strong to maintain stable revenue.

  • Difficult to navigate integrations: As a startup Arcube need to initially invest in integrations (specifically airline data retrieval) which is expensive and time consuming as a result of the archaic airline tech stack.

Competition

Founders

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