Korean travel app My Real Trip readies fundraising on growing travel demand

[Courtesy of My Real Trip]

My Real Trip Co., a South Korean startup that operates a travel application, is hoping to raise up to 70 billion won ($52.83 million) in funds for investment in new growth engines.

According to the investment banking (IB) industry on Thursday, My Real Trip is engaged in the procedure to attract 60~70 billion won in investment. The company is known to be in contact with domestic and foreign venture capital firms.

My Real Trip, founded in 2012, sought to differentiate itself from industry competitors by improving the complex distribution structure of travel products as existing package tours had to go through travel agents, domestic travel agencies, and local travel agents to connect travelers with local guides.

My Real Trip allows travelers to connect with local guides directly through the app. This not only reduces costs, but also increases convenience.

The company first started with travel destination bookings and expanded services to include airline tickets, accommodation, and car rentals. Until 2020, the company won a cumulative investment of more than 80 billion won from Altos Ventures Management Inc. IMM Investment Corp., and Smilegate Investment Inc.

According to data from the Financial Supervisory Service, the operating income of My Real Trip, which surpassed 35.9 billion won in 2019, plunged to 7 billion won in 2020 and 4.4 billion won in 2021 in the wake of the pandemic.

Although the figure recovered to the 22 billion won range in 2022, fundraising did not come easy due to the investment market crash that year.

In response, the company received 50 billion won from VIG Alternative Credit (VAC) created by VIG Partners and handed over its bonds with warrants (BW). Instead of taking an equity investment at the expense of lower corporate valuation, the company decided to raise funds through loans without compromising valuation.

The investment of up to 70 billion won was driven by the company’s strong performance following the waning pandemic. My Real Trip reached the monthly break-even point in July and is expected to post an annual profit for the first time this year.

The company has been recognized as a promising business at home and abroad, being named one of Forbes Asia’s 100 to Watch in 2023.

The proceeds will be used to redeem the BW issued by VAC and invest in new growth engines. My Real Trip will focus on increasing the use of the app among consumers in their daily lives, not just on vacations, on expectations that the number of telecommuting, flexible work arrangements, and workcations will rise.