Moscow-based online air travel booking startup OneTwoTrip announced this morning that it has raised $9 million in funding from Phenomen Ventures fund in exchange for a minority stake. The site offers Russian travellers a way to book their flights online, providing price comparisons and choice of airline. OneTwoTrip has already managed to gain considerable traction in Russia, launching first in beta back in May 2011 and then graduating to a full release in September of last year, and growing to average daily ticket sales of 3,500, with projected total bookings in the $400 million range (of which OneTwoTrip sees a 6-7 percent cut) by the end of the year.
OneTwoTrip has succeeded in part because they launched with a solid product, with a website that definitely offers a more contemporary feel when compared to its competitors. The timing is also a big factor in its success, however, as online tourism in Russia is a fast-growing market – Phenomen Ventures’ partner Dmitry Falkovich, who also joins the OneTwoTrip board as part of the deal, said in a press release that Russia’s online tourism is growing at a rate of roughly 70 percent per year, and scattered reports from various destinations including Bulgaria, Greece and Abu Dhabi put the number of incoming Russian tourists on a rapid rise, sometimes up by as much as 128 percent this year over last.
The growing market for Russian travel gives OneTwoTrip room to run, and this investment is slated to help build out the site’s advertising and development, including future planned service additions like hotel booking, car rentals and cruise tickets. OneTwoTrip is founded by Peter Kutis, who was also previously on the founding team of competitor Anywayanyday, which already offers all of the above. Overall, there are a lot of players vying for elbow room in this growing market, including Ozon Travel, subsidiary of massive Russian e-commerce player Ozon, and Oktogo.ru (run by a former Mail.ru founder) and Ostrovok.ru for hotel booking.
In terms of differentiating itself, OneTwoTrip is banking on a sophisticated search engine that uses flight ratings broken down by airline which incorporates delay frequency, cancellation occurrences, space in the cabin and between seats and how old the aircraft is, as well as providing savings that it claims have amounted to over $1 million overall for its customers since launch. It could be tough to dig out a lasting space with so many interested in Russian online travel, bu so far OneTwoTrip’s rapid first-year growth, which has made it already “highly profitable” according to Falkovich, seem to indicate that the market can bear another entrant in this category.