Hopper Lands $100 Million to Expand Its A.I.-Based Booking App

October 8, 2018

By Carlo Versano

Travel-booking app Hopper is carving out a lucrative niche in a crowded market by combining artificial intelligence and push notifications to woo flexible travelers.

And Dakota Smith, head of growth and business, said the start-up is "going all in" on A.I. technology.

After completing a $100 million Series D round of funding, the company, founded back in 2007, is now valued at close to $800 million. It's building its A.I. "brain" to compete with industry giants like Kayak, owned by Booking.com ($BKNG), and Google ($GOOGL) in an area that machine learning is beginning to radically change.

Hopper uses A.I. and predictive analysis to forecast flight prices and advise users what the tech "thinks" will be the proper moment to buy.

That isn't a particularly new idea ー Kayak has allowed users to sign up for price alerts for years ー but Hopper's fully-mobile experience and use of push notifications has distinguished it from competitors, many of which rely on web-based user experiences that are more difficult to "re-engage" with, Smith said.

"It's hard for one player to capture all of the intent," Smith said in an interview with Cheddar Monday. He added that the "true intent" of a trip ー a wedding versus a weekend getaway, for example ー will determine how and when a traveler makes his or her plans.

Figuring out engagement is one of the key to Hopper's success, as travelers have not typically shown fealty to one booking website in the past. But people interact with mobile apps differently and use push notifications in a way that keeps them engaged with apps they find useful. The typical Hopper user visits the app 20 times in preparation for a purchase, Smith said. A full quarter of them actually change their tickets based on the app's recommendations.

That data-driven approach has gained Hopper a following among flexible travelers who use the "Watch" feature to set parameters for an upcoming trip months out and then wait for the precise moment when the A.I.-driven engine suggests pulling the trigger. Sixty percent of the time, the app recommends waiting, Smith noted.

In addition to investing in its technology, Hopper will use some of its new funds to expand into international markets, where Smith said the app has been growing organically, despite any infrastructure in place.

For full interview click here.