Investment Tracker: FLYR’s Data Science Shakes Up Travel Industry

Investment activity picked up markedly in the penultimate week of January — but only as a headline.

For the $1.4 billion in dealmaking activity seen in the week, roughly 85 percent came from the deal that BDO Unibank, the largest bank in the Philippines as measured by assets, floated, netting $1.2 billion. That capital is earmarked toward helping the firm’s balance sheet ahead of new capital rules that go into effect within the next two years.

That deal was followed, on a significantly trailing basis in terms of deal size, by Raisin, which grabbed $32 million in fundraising. The German FinTech startup has raised $64 million cumulatively and will use that money to expand its banking platform across Europe. The latest funding round was led by Thrive Capital.

Close on the heels of that $32 million garnered by Raisin, $30 million came Bitfury’s way, as the bitcoin miner looks to expand its presence in China. The investment came as Credit China FinTech, which put up the money, formed a joint venture with a focus on the country.

FLYR’s Data Science Shakes Up Travel Industry

Even with the push to online commerce, finding affordable fares and booking deals is still a game of chance for consumers. Travelers can get locked into fares only to see prices go down at a later date, or their schedule can change, resulting in large changes or cancellation fees.

But one data science startup looks to shake things up by predicting airfare — and investors are taking notice.

FLYR is a data science company that sits at the intersection of travel and financial technology, said Project Manager Andrew Jing. Founded in 2013, FLYR aims to serve as the nexus point between all three, leveraging Big Data and predictive analytics to solve for consumer and industry pain points in travel.

As any frequent or even casual traveler knows, the pricing of airline tickets is constantly in flux.

“The goal is to sell every available seat to the highest bidder,” Jing said. “You enter this game where airlines shift prices according to supply and demand and do so in accordance to the specificity of each route and time of day. Each one has its own supply and demand curve over time.”

Given the complexity of the ecosystem, there’s little chance that consumers could work to optimize fare selection alone, so FLYR aimed to automate the process using recent tech innovations and advances in data science. FLYR’s algorithm doesn’t just inform them when to expect the lowest fare in general or on what airline it may or may not be.

“We can process more information now, and we produced our first algorithm called Foresight,” Jing said. “It allows us to make predictions on how airfares will move with the precision of flight number. We’re going to tell you, for example, that the cheapest flight will be SFO to JFK UA123 departing at 8:30 a.m. on this day.”

Not only that, but the algorithm will inform on when it’s optimal to buy, what the difference in price would look like and all of the probabilities attached. Jing said that the algorithm was the basis for all the technology that followed.

FLYR’s first product, called FareKeep, tackles the industry-wide issue of change and cancellation fees. FareKeep runs on partners’ channels where a system exists to search for and book flights — desktop, mobile web, in-app — and is offered to customers during their booking flow.

“FareKeep allows consumers to purchase the option to book their flight at today’s price,” Jing said. “Any delta that results from a change in price from the airfare that they booked is covered by us up to $200 per passenger.”

For a fee generally between $8 and $15, Jing said, FareKeep allows travelers to book without being fully locked into price or itinerary. If the fare goes down at a later date, FareKeep reimburses. Changing the flight time or canceling the trip altogether no longer comes with a fee.

“Sometimes life happens,” Jing said. “You see a great airfare when you’re booking online, and you want to book it. You want to save that price, but for whatever reason, you need more time. FareKeep allows you to do that without making the commitment, allowing people to have flexibility for a low price.”

FareKeep benefits the airlines as well, despite what looks like a loss of revenue by cutting out change and cancellation fees.

Jing explained, “You see the airlines rolling out this function for themselves. When they do this in-house, these large organizations have to commit to financing and maintaining a team that they would have otherwise not required.”

On top of that, Jing said airlines introducing this kind of system natively will suck up their own inventory.

“They’re canceling out the fact that you could have sold the fare one day later to a different bidder for a higher price,” he said. “But we’re agnostic to the airlines, and we’re agnostic to the inventory.”

Recently, FLYR raised $8 million in Series A funding in a round led by Thiel Capital, with additional participation from JetBlue Technology Ventures and Streamlined Ventures, among others.

“We were thrilled that Peter Thiel, through his fund, was able to lead,” Jing said. “Our investors understand well what it is that we’re aiming to achieve in both the near term and the long term for the industry,” Jing said.

So far, Jing said, FLYR has sold FareKeep to users in over 60 countries. Travelers booking with FareKeep saved an average of $75 — not counting, he said, the savings consumers can see by being able to cancel a booking altogether without the accompanying fees.

But that’s just the beginning. FLYR’s technology is relevant in a number of other segments, like the hotel business, car rentals and movie theaters, Jing said — anywhere there’s a use-it-or-lose-it system of sales.

With the recent funding round and involvement from a growing number of partners, FLYR will continue to grow its current offerings and develop new ways to leverage its data processing capabilities to benefit those involved in the travel industry.

“We’re trying to really enact a system that is going to benefit all parties and to give more flexibility to consumers, while, at the same time, helping maximize the revenue that a lot of carriers, hotel operators are worried about,” he said.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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