There was a time when traditional payment giants such as PayPal and Shopify disrupted the banking model. Today, it is the time for vertical SaaS in financial technology or fintech. This emerging market is zeroing in on small to medium-sized businesses contributing over 50% of GDP in high-income countries worldwide. But is it a one-sided affair? How are SMBs responding to the solution?
According to Johannes Koeppel, CEO and Co-Founder of WeTravel, “SMBs don’t want different payment solutions; they want payments integrated into their business software.” Johannes, a U.C. Berkeley MBA graduate, built WeTravel as a vertical SaaS (integrated payment) platform in the travel space akin to the Mindbody that offers scheduling and payment solutions to the world of wellness and businesses and Toast that offers transactions, records purchased items, manages payroll and more for the resturant industry.
One of the most significant highlights of vertical SaaS is the cost compared to legacy payment giants. While legacy fintech providing payment solutions can charge up to 5% per transaction, WeTravel and peers charge less with the same security and flexibility benefits. It is also observed that vertical SaaS helps businesses reach a tailored audience offering higher conversion rates and scalability prospects. The US travel payment startup highlights the importance of finding a market with depth and maturity over creating a product of mass appeal.
Built by immigrant founders, Johannes, Swiss by birth, met his co-founders Garib Mehdiyev, a former banker from Azerbaijan, and Zaky Prabowo, an ex-aide to Indonesia’s president and consultant for McKinsey & Co., at the Berkeley Business School. With a penchant for travel and key insight into the small business industry in the travel sector, WeTravel was a no-brainer that raised its Seed fund from 7 investors, including 500 Startups, Amino Capital, and others. It also had a PreSeed round, raising a total of $2M to kickoff the vision to empower small travel businesses.
The product demo reveals how WeTravel integrates multiple payment (FinTech) solutions with its booking software at the industry’s lowest processing fee of 1%, so businesses can best monetize. Through its Basic subscription—free for use, with no monthly or set-up fees—travel organizers can set up their Stripe or Mangopay accounts to accept travelers’ payments and payout to the user’s bank account; all refunds and disputes are managed through Stripe or Mangopay. Users can set up installment payments, contribution payments, deposits, and deadline payments within the platform’s traveler payment options. As a WeTravel Pro user, trip organizers can accept travelers’ money to their WeTravel account, with multiple payout options, including free refunds.
Among other SMB-friendly features, WeTravel offers payout options for optimizing cash flow, which is crucial for small businesses. WeTravel users collect funds from customers and use flexible payout options through standard or instant payout to manage payment within the business, including staff and tour leaders. Through its international fund transfer solution, users can save money and improve vendor and supplier relationships through reliable solutions like WeTravel card, vendor transfers and traditional wire transfers.
In its prototype, WeTravel was released for student group trip organizers; the platform accepted more than USD 600k in traveler payments within its first year. After the initial MVP, the business expanded its product in the multi-day travel market (wellness, tour operators, sports/recreational, religious, educational), noting that other horizontal tech giants—like Square and WordPress for trips—handled elements of travel-specific payment needs, but at a high cost and through disjointed technology.
Given the momentous takeoff, WeTravel seems to have a very razor-sharp focus on being the undisputable integrated booking and payment platform built for multi-day travel companies while expanding its FinTech and SaaS solutions to meet the industry’s needs. No matter the humble beginnings, Vertical SaaS Fintech WeTravel seems to be AirBnb in the offing. With its tech ability to command a niche but a large market within its expertise, with an all-inclusive crew led by a woman in travel technology, Nubar Khalidova, vertical SaaS fintech WeTravel has surer footing to scale to prominence.