Hong Kong-based AI digital solutions startup TravelFlan is aiming to close an A-plus fundraising round in the region of $12 million by end-May, with a couple of term sheets expected next week, co-founder and CEO Abel Zhao told DealStreetAsia.
The startup last raised $7 million in its Series A round led by SPK AI Travel Tech, an investment arm of Lazard Korea, in December 2019.
Zhao said the fundraising round was expected to include seven venture capital funds: Four from China, one in Hong Kong, one in Singapore and one in South Korea.
But, due diligence is proving difficult amid COVID-19 related travel restrictions, he noted.
The COVID-19 outbreak has infected 1.9 million people globally, with around 123,000 deaths, according to World Health Organization data released Wednesday.
“The challenge for us is, personally, I cannot see them,” Zhao said, noting one fund based in Beijing has already said it isn’t sure how to proceed, although it’s prepared to write the cheque.
Hong Kong-based Zhao said TravelFlan was hoping to clinch the deal by having his partner, who is based in Shanghai, meet the Beijing fund there, while he participates via video call.
TravelFlan uses AI and big data to make consumer travel recommendations through an individualised chatbot. That means different customers asking the chatbot the same questions would likely get different, individualized answers based on their behavioural data.
The fresh fundraising process comes even as the travel industry is facing an unprecedented global travel halt.
During other previous major upheavals – such as SARS, the 9-11 terrorist attacks, the dotcom bust and the global financial crisis – the travel industry did not face the shutdown of most air traffic, land travel and hotel operations. In Singapore, hotels are currently unable to accept new bookings.
In mid-March, the World Travel & Tourism Council estimated up to 50 million travel- and tourism-related jobs globally were at risk due to the COVID-19 pandemic, with global travel likely to take up to 25 percent hit this year.