How B2C Startups Are Reforming Business Travel & Expense Management


Days of glory

The future of mid-sized companies (revenues $20 million – $2 billion) in India has been brimming with optimism. This segment which comprises majorly of second generation family businesses or first generation entrepreneurial ventures, including startups makes up for a whopping 75% of listed businesses in India.

Companies, especially the ones in eCommerce and technology sectors have become hot favourites among PE investors and venture capitalists. This is evident from the fact that early-stage companies bagged 254 of the total 469 PE deals in 2014, reflecting greater faith in India’s home grown entrepreneurs. A recent study by CB Insights offers further evidence of growth – out of the top 11 Asian ventures that went from seed funding to series A the fastest, 4 were from India. Overall, Asian startups surpassed their European peers, going from seed to series A in an average of 427 days against 465 days taken by European ventures.

Dark side of the boom

However, this raging growth and optimism was also a bubble waiting to burst. In the past few months, we have seen companies making the headlines for reasons not favourable to them – flawed business models resulting in shutdowns and mass layoffs. These incidents bring to light the bitter realities of the startup eco-system that are often overshadowed by the multi-billion dollar valuations and multi-million dollar funding rounds that some of them have received.

With funds pouring in at a rapid pace, using the funds effectively and achieving a balanced growth within various organisational functions became difficult for these companies. Most succumbed to the financial pressure. Not surprisingly, flat-lining due to cash constraints ranks among the highest reasons for startup failure.

A silver lining

Amidst the ones that failed, there are many that have been able to hold their heads above the water.

Some of the successful ones have had a substantially positive impact on the overall business eco-system – something very few of us take notice of. Let’s see how.

As businesses in India grow and expand across multiple locations, their travel spends increase. In 2014, India recorded $26 billion in business travel spending and is poised to grow by a compound annual rate of 11.5% through 2019 to $45 billion. Increase in business travel spending calls for expense policies and processes to be put into place – is a herculean task for most companies.

So how do startups make travel and expense management easy for businesses?

The Travel And Expense Playbook

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Think about all the companies that fall within your line of consideration when you’re preparing for business travel. Where do you find the best air ticket? Which cab do you take? Which hotel do you book? Where do you order the next meal for lunch? There are disruptive startups in each of these verticals and each of them have something valuable to offer to business travellers.

Let’s take the example of taxi operators like Uber and Ola, hotel operators like Oyo Rooms and food ordering platforms like FreshMenu. What are some of the things they have in common that employers and employees would find useful while planning and managing business travel.

Ease, experience and autonomy through mobile

By 2020, 50% of the workforce will be under the age of 32 and will account for 50% of all business travellers. When it comes to business travel, studies show that this generation prefers autonomy and speed over process and is more comfortable planning their travel itineraries on their own than through corporate processes and agencies. Also, young business professionals are much more “experience” focused compared to their older counterparts. All startups mentioned above offer business travellers the ease, experience and autonomy they need through mobile apps- whether it’s booking a cab or a hotel, ordering food,etc.

Predictability of cash flows through standardized pricing

When you are creating your company’s travel budgets for the month or the quarter, it’s often difficult to estimate how much money should be allocated to which category of travel and how much should be ideally spent. However, if you look at the startups mentioned above, it’s easy to create travel budgets because of the standardized pricing they have on offer.

Based on the number of people travelling, the average number of distance travelled and price per km (as clearly shown by Uber and Ola), you can easily calculate how much money your employees will spend on cab fare in a week or a month. Similarly, meals on food ordering platforms like Freshmenu fall into the range of Rs 150-250 per person. For companies offering to pay for their employees’ meals, calculating the total cost of food is a cake walk. Similarly, defining a permissible price range for hotel bookings is easily possible via Oyo Rooms. Employers can conveniently control travel budgets by setting maximum spending limits or setting customised budgets for the needs of individual departments or teams.

Different strokes for different folks

The aforementioned startups also make it easy to define policies and spending budgets for business travellers across various designations, teams and projects. With multitude of cab variants available (UberGo, UberX and UberBlack, etc), companies can decide who can take which variant, the frequency of travel and for what purpose – e.g. ‘Use UberBlack while travelling with a client’. Similarly, Oyo Rooms has different types of accommodations like Oyo Budget Rooms, Guest houses and Oyo Premium.

‘Less is more’ for easier decision making

Time is money for business travellers. The faster they are able to book or order, the more time they have to dedicate to tasks that matter. Take the example of food ordering startup, FreshMenu. With limited choice of meals per day, taking a decision of what to order is simple, fast and hassle free. Rotation of dishes every single day also helps combat boredom. As a bonus, FreshMenu’s global cuisine makes it easy to order food for local employees as well as foreign visitors.

Availability across cities helps in defining merchants for each category

Last but not the least, these startups have presence across all major cities that business travellers typically visit. Hence, company administrators can make these merchant names a standard in their expense policy clearing any confusion in the traveller’s mind as to what his go-to merchants for travel bookings and management should be.

We are sure there are many more of such B2C startups that are making life easy for business travellers and their employers every single day. With simplicity, technology and transparency, they are making it easier for employers to create well-defined expense policies, and manage travel spends and budgets with ease and efficiency. For employees, these startups offer tools that give them the freedom to manage their travel on-the-go with minimal time and effort.

If you too would like to automate expense management for your business, you can refer to our free eBook on ‘The 6.5 Minute Guide to Automated Expense Management’, or signup for a free demo with Happay by clicking here.

About the author:

Varun Rathi is Co-Founder of Happay. Happay is a next generation expense management platform for corporates, enabling employers to have complete control and visibility into travel and other spends via one single platform.

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Disclaimer: This column is powered by Happay

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