SmartRyde, the Japanese startup behind a global airport transfer marketplace under the same name, announced that it has secured approximately 180 million yen (about $1.6 million) in a Series A round. This round was led by Angel Bridge with participation from SMBC Venture Capital, Hiroshima Venture Capital, SG Incubate, Yamaguchi Capital, Iyogin Capital, Inventum Ventures, Optima Ventures, and two individual investors: Shoji Kodama(Founder and CEO of Laxus Technologies) and Nobuaki Takahashi (Founder of Phil Company, Representative Partner of NOB).
For the company, this follows their seed round in December 2019 when Angel Bridge poured cash injection into the startup for the first time.
Originally known as DLGP, SmartRyde was founded in March 2017 by founder Sota Kimura, a student at Ritsumeikan University, after he was ripped off by a cab driver on his way from the airport to the city in Thailand. The company has worked with more than 650 airport transfer cab companies in 150 countries, as well as with more than 25 OTAs (online travel agencies) such as Booking.com, Expedia, Trip.com, Traveloka, and Despega. The company offers airport transfer cab sales service to users purchaing airline tickets through OTAs.
The service is beneficial to both OTAs and travelers. For travelers, it frees them from the hassle of finding transportation to downtown at the airport. You may know Uber, Grab, and other ridehailing services are not allowed to operate to protect the employment of local cab drivers in selected countries. Furthermore, it may be very helpful to have a driver with your name waiting for you in the arrival lobby, and to have a means of transportation in advance in an environment where you may be less familiar with the language in the destination.
Meanwhile, OTAs are a very thin margin business. They are trying to diversify their product lines to car rentals and various activities in addition to airline tickets and accommodations, but price competition among them intensifies as users try to choose the cheapest option by comparing results from multiple OTAs. Furthermore, OTAs can’t sign contract with every single airport cab operator in the world, but having a bundler like SmartRyde simplifies the coordination process and creates an additional revenue stream.
In general, it is difficult to grab the status quo of demographics of visitors because their nationality may differ from their actual place of residence, but SmartRyde asks for a contact phone number at the time of sign-up, and from that country code, they are able to understand which region’s residents are visiting. According to the company, although business travel demand has decreased due to the pandemic, recently there has been an increase in cases of leisure use by families of 4-6 people, and users from the US (19%) and the UK (16%) have been visiting resorts in the Caribbean such as Cancun and Dominica.
The company will use the funds to hire business developers and engineers from around the world, strengthening system integration with OTAs and building a reservation management system for cab operators. In Japan, as you may see from the names of investors participating this round, the company will focus on revitalizing countryside and tourist destinations in collaboration with local cab operators and these VC firms.