It's the Globe's way of putting some English on the $camdemic:
"Pandemic prompts business travel firm Lola to pivot into expense management software; Paul English’s venture takes a major detour, but it could pay off in the long run" by Jon Chesto Globe Staff, October 28, 2020
What do you do when your company’s only market is on the brink of evaporating?
If you’re the Boston travel firm Lola.com, you adapt as quickly as you can.
On Wednesday, Lola executives Paul English and Mike Volpe will announce a new business line, dubbed Lola Spend, that will offer chief financial officers and other bean counters a way to monitor and control nearly every form of corporate spending. Previously, Lola was entirely focused on helping employers manage corporate travel purchases and expenses.
It’s a good example of the Pandemic Pivot: Businesses of all sizes are rethinking their strategies right now in light of the seismic shifts in consumer and business behaviors brought about by COVID-19.
For Lola, the shift happened almost overnight, as English and Volpe tell it. In early March, Lola noticed a modest softening in US business travel, but within a week’s time, the situation worsened drastically. Concerns about the virus prompted them to tell employees to work from home, and then the travel slowdown cascaded into an outright collapse. Volpe, the chief executive, said the firm had to lay off 30 of its 100 or so workers.
Meanwhile, they decided to dust off an idea hatched the prior summer that became Spend, and put half of Lola’s engineering team to work on it.
Lola is fortunate to have a cushion of venture capital funds; it raised $37 million just last year, in a round led by VC firms General Catalyst and Accel.
Volpe said Lola Spend could eliminate the need for expense reports, as expenses are handled by Lola in real-time through the Lola app. Because transactions are made on a company card, there’s no need to reimburse the employee. For expenses over $75, the user just uploads a photo of the receipt on the spot to provide the necessary documentation required.
“It’s not a five-percent better version of Concur,” said Volpe, referring to one popular example of expense management software. “It’s a completely different way to think about the problem.”
He said Lola would have eventually developed this product, but before the pandemic, travel revenue was rising rapidly, so there was no urgency.
“With all the pivots I’ve done in my career, there’s always questions about, are we moving fast enough, [or] are we moving too fast?,” said English, the cofounder of Lola and its chief technology officer, and who previously co-founded the consumer travel firm Kayak.com.
As far as English is concerned, you can never pivot too quickly. “You need to put more resources on it than you think,” English said. “Change is hard.”
The most effective pivots, English said, are ones that keep you close to your original core strengths. In this case, Lola is dealing with essentially the same contact people in its primary target market — namely, finance officers at companies with 50 to 500 employees.
“Listen to your customers,” Volpe said. “They can point you in the direction of new problems you can solve.”
Another Boston-area travel-tech firm is also branching out because of the pandemic. Tripadvisor, the operator of consumer-focused travel websites, said on Tuesday it has developed two new revenue potential sources. Kanika Soni, the Needham company’s chief commercial officer, said the new ideas came from examining the most important needs for hotels struggling during the pandemic.
Tripadvisor will now offer a business intelligence software called Spotlight that will help hoteliers predict occupancy rates, and Reputation Pro, which will send review requests to travelers on a hotel’s behalf, for multiple platforms.
For Lola, the pivot opens up a much broader potential market, while it continues its corporate travel business with the hope for an eventual recovery. Many companies have minimal travel budgets, but most have some sort of expense account to track.
“We wanted to … use this as an opportunity rather than just trying to hide,” Volpe said. “The pandemic pushed us to do this sooner and faster.”
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One of the catalysts:
"General Catalyst-backed SPAC files for a $500 million IPO" by Anissa Gardizy Globe Correspondent, October 27, 2020
The Cambridge-based venture capital powerhouse General Catalyst — which has backed notable tech names such as HubSpot, Instacart, and Venmo — is taking a dip into a new kind of investment vehicle that’s become popular on Wall Street.
General Catalyst is the sponsoring firm behind a special purpose acquisition company, or SPAC, named Health Assurance Acquisition Corp., that plans to raise $500 million in an initial public offering, according to documents filed with the Securities and Exchange Commission on Monday. Health Assurance plans to invest the proceeds in companies at the intersection of health care and technology; however, General Catalyst is pursuing a slightly different style of SPAC listing, known as a “Stakeholder Aligned Initial Listing,” in which it will take a smaller stake in exchange for other investors agreeing to buy into a long-term strategy for Health Assurance. So instead of owning 20 percent of the company, as is typical in SPACs, General Catalyst would hold a 5 percent stake. The Health Assurance IPO would also have fewer investors overall in order to ensure all the shareholders are behind those long-term goals.
General Catalyst said it’s also set up so that initial investors do not see profits until after outside shareholders.
“Our economics are contingent upon sustained performance,” the firm wrote in its filing. “Our initial stockholders will not earn returns on their alignment shares until our other stockholders do.”
The offering expects to sell 50 million securities at $10 each.
Health Assurance Acquisition said it believes “health care is at the beginning of its Internet moment,” and it wants to power the next wave of “consumer-centric, data-driven, cloud-based health care” companies. Like other SPACs, Health Assurance Acquisition’s goal is to use the money raised in an IPO to acquire an existing company.
As a model for the type of businesses its wants to target, Health Assurance points to Palo Alto-based health care startup Livongo Health, which was just purchased by the telemedicine company Teladoc Health for $18.5 billion. Livongo was started in 2014 to help people with diabetes better manage their condition, giving them access to real-time data about their insulin levels.
Much of Health Assurance Acquisition’s management team hails from Livongo.
General Catalyst managing director Hemant Taneja, who was the lead investor in Livongo, will serve as chief executive and chairman of Health Assurance. He will be joined by Livongo’s founder and executive chairman Glen Tullman, as well as its president Jennifer Schneider.
“We want to create the conditions for 1,000 Livongos to bloom,” the company wrote, adding that General Catalyst already backs these types of companies. “We believe there will be dozens of multibillion-dollar winners created by this sectoral shift, and HAAC has a set of core beliefs and values that will help to identify the best health assurance businesses.”
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Related:
One is will doctors and physicians even be needed, and don't forget to say aaaah to the camera.
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