Just me and the idea, no name, no website, no inventory: How VC cash helped one entrepreneur start
7 min read
02 March 2015
Looking for a holiday cottage in Britain for this summer? Snaptrip offers holidaymakers late deals on a choice of 25,000 rental properties all around the country.
This month it became the largest website for self-catering holiday rentals in the UK and Ireland following its partnership with homes brand Cottages4you.
Adding another 11,000 properties from Cottages4you to the Snaptrip site, and with the introduction of the Hoseasons portfolio in the coming weeks, will see the total increase to over 35,000 listings. The London venture plans to dominate the last minute holiday rental sector with a combination of the largest selection for consumers, discounts and a unique membership model of exclusive deals and offers available only to its members.
It’s quite an achievement – especially if you consider that the Snaptrip founder’s new business consisted of almost nothing when he first went to meet his investors.
“I took the idea to an early stage enabler and investor called Forward Partners,” said Matt Fox, who is now CEO. “I went in there when it was just me and the idea, no name, no website, no inventory. They helped me validate and launch the business in the best strategic way possible. So we were all there in the room when it started gaining traction and the idea started proving itself. It was an exciting first year.”
Fox explained: “The previous business I worked for was a holiday rentals business and we noticed the immense amount of unsold inventory. It made us look at the opportunity of not just a ‘deals’ area of our website, but a dedicated website that matched up suppliers of rental homes who were happy to give a deal to get occupancy to holidaymakers looking for a bargain. When I left that business I always promised myself I’d have a go at creating it myself.”
Forward Partners is one of a number growing number of venture capitalists who regard their role as providing more than cash and attending board meetings. They help entrepreneurs develop test and build an idea for a business in their offices, using the skills of their in house teams. Other clients include licensed taxi app Hailo and peer-to-peer lending service Zopa.
Forward Partners invested in Snaptrip because they realised that there was a market opportunity for a dedicated “last minute/deals” brand in the self-catered holiday rental sector and because they believed that Fox had the necessary attributes and background to build and launch a successful start up as well as having relevant experience.
“Launching a tech startup in any sector is a big task and entrepreneurs are faced with many strategic challenges,” added Fox, but he felt very comfortable with Forward Partners. “The impact was immediate and there’s no doubt they contributed hugely to where we are today and what we’ve achieved. If I had bootstrapped the business with small loans or self-funded we wouldn’t have made nearly the traction we have. For me as an entrepreneur, doing a deal and bringing them in on an equity basis that early simply increased the opportunity for success.”
Read more about the travel sector:
- Removing the ‘luxury’ tag from private aviation and marketing it as time travel
- Former Esquire Young Entrepreneur of the Year raises $2m for Triptease venture
- Alex Saint: “We hand pick only the very best hotels”
Shortly after the business was set up Fox recruited his chief technology officer, Dan Harrisons. “Not only is Dan hugely talented technically, but he has ten years of travel sector experience and contacts that he brought to Snaptrip. The amount of ‘wins’ we’ve had on the back of his expertise and contacts are too many to mention.” The company’s total venture capital funding has reached $1m.
Inevitably it hasn’t been all plain sailing, though. After months of brand testing and playing with “around a million names,” the team discovered that the URL snaptrip.com wasn’t available. Despite their fears that it could cost a fortune to buy the owners proved to be very reasonable when it came to negotiating a price.
Fox and his team want to further entrench Snaptrip in the UK holiday rentals market and then look overseas. He advises other entrepreneurs and small business owners to spend time building and incentivising the right team. “You have no chance of success unless there’s a group of you going for it 100 per cent with complete passion for what you’re trying to achieve,” he says. He’s also a firm believer in small entrepreneurs looking to venture capital as a source not only of finance but also of support and advice.
Matt Fox’s experience is one that is familiar to the British Venture Capital Association (BVCA). “Access to finance is one the biggest challenges facing start-ups and SMEs across the UK,” commented Tim Hames, director general of the BVCA. “Despite the economic recovery, bank lending remains stubbornly hard to secure and this is having a real impact on the growth prospects of not only smaller business but the economy as a whole. And this is where venture capital comes in. Venture capital is all about backing dynamic, high-growth, high-impact companies and turning today’s startups in tomorrow’s market leaders.”
Hames argued that the government needs to make it easier for businesses to access funding, not just through venture capital but with all forms of finance. He pointed to a report last week by the Business, Innovation and Skills Select Committee, calling on more promotion both traditional and alternative finance through clear signposting of the services available from alternative finance providers.
“There’s more than one route to growth,” urged Hames, “and venture capital combines both funding and business expertise, making it perfectly placed to back the new generation of entrepreneurs.”