An unexpected fact – people spend many times more money on buying intangible experiences than on buying physical goods! “Experiences” include travel, excursions, fitness classes, culinary masterclasses, and a bunch of other things. And many small companies sell them, which are still poorly digitized. Therefore, you can make big money by selling them such platforms.
Project Essence
Holdbar believes that their platform is “the one tool that’s enough to sell new experiences.”
“Experience” is a term for which it is difficult to find an exact equivalent in Russian. In this case, it refers to the fact that the customer is buying not a physical product, but sensations and emotions that they experience during some activity.
The simplest example is travel, where people go precisely for new experiences.
Therefore, travel agencies are the startup’s primary target audience. Additionally, potential customers of the startup include wineries, hotels offering active leisure activities, operators of sea and river cruises, museums, organizers of fitness tours, excursions, culinary masterclasses, health classes, and other companies selling what cannot be touched but only felt.
The Holdbar platform offers these companies a comprehensive solution, including website creation with descriptions of “experiences,” their booking and payment, including as gifts, internal CRM with the ability to view bookings and communicate with buyers, as well as marketing tools for working with the growing database of registered users and customers.
The platform can be used for free, but then the company must pay the platform a 3.5% commission on payments accepted through the platform, and the number of bookings will be limited. Paid tariffs for €49 and €119 per month provide an unlimited number of bookings, and commissions for payments are reduced to 1.8–2%.
The startup originates from Denmark. It has now raised $3.5 million in new investments and has revealed that it previously attracted $1 million to launch the platform.
What’s Interesting
The platform seems quite straightforward, so the question arises: why did the startup get funded 😉? Well, as usual, it’s all about the market it’s targeting.
Firstly, the largest market for selling experiences is travel, and the travel market is now recovering briskly after the quarantine. In 2023, it already grew to $850 billion, surpassing even pre-pandemic levels of $750–780 billion.
Secondly, there’s a global megatrend: the share of physical goods in total spending is significantly and steadily declining, while the share of intangible experiences (travel, entertainment, events, etc.) is also significantly and steadily growing!
The problem is that the majority of experience sellers (particularly travel agencies) are small companies whose businesses are still poorly digitized. In terms of digitization, this market significantly lags behind most others.
According to Euromonitor, people spend $1.1 trillion annually on non-tourism-related experiences, which adds to the $239 billion that tourists spend on experiences (tours and other entertainment).
Therefore, the startup’s main target audience is poorly digitized experience sellers, mainly small regional companies. Nevertheless, their sales volume is growing by 5–7% annually.
Holdbar intends to sell its platform to them, which will allow them to replace the variety of tools they currently use.
In the initial development stage in 2023–2024, the platform will include:
basic tools for website creation, booking and payment mechanisms for services through sellers’ websites, as well as for selling them through tour operators’ websites, tools for analyzing the effectiveness of advertising.
From 2025, the second stage of platform development will include:
tools for creating advertising banners and marketing materials using AI, tools for automated advertising placement, a full-fledged platform for rapid website creation, a full range of analytical tools, dynamic pricing tools, a set of insurance and financial products for buyers, the ability to attract funding for business growth.
Already, the startup has signed up over 50 clients for its platform, with a conversion rate of 50% from the potential client base. Moreover, the startup expects that once critical mass of clients is achieved in target regions, new clients will start coming to them “automatically” as a result of forming a “common opinion” and recommendations from existing clients. To achieve this, they need to use advertising and direct sales to acquire the first 50–100 clients in a city.
The first quarter of 2024 will be dedicated to developing a new version of the platform and preparing the team for a leap, after which they will actively roll out their product in Europe, starting with Scandinavia.
As one of the investors in the current round stated: “Holdbar is going to do for travel and other experience sellers what Shopify did for online stores.” In other words, provide them with a platform for quick creation and management of efficient online stores that are not dependent on the conditions and whims of marketplaces.
A similar platform for experience sellers was created by another startup, Easol. It raised $29.6 million in investments.
The startup Bandwango, which targeted regional experience sellers with its similar platform, which, among other things, helped attract new tourists to their regions and fill local budgets. This startup raised $9.2 million.
Where to Run
The first direction of potential movement, based on today’s Holdbar argumentation, was quite distinctly outlined: creating simple yet comprehensive platforms for experience sellers.
The focus should be on small regional companies, especially in regions where tourist flows are present, as travel and related service sellers are one of the key audiences for this.
The second direction is more general. It is based on the fact that a huge number of small businesses in a range of markets are still poorly digitized. Despite us, as sophisticated individuals, believing that “everyone already has it” 😉
Several examples can be given to demonstrate the movement already underway in this direction.
The startup Durable, which I wrote about at the end of last year, created a platform for AI-powered rapid website creation. Their target audience became small companies that have long been present in the market but are either absent or barely present online — such as repairmen, plumbers, fitness trainers, landscape designers, freelancers, and other specialists.
The founder claims that in the first year, their platform created 6 million websites! Admittedly, many of them were “just for trial” — but the sudden demand for such a platform doesn’t negate its relevance.
Moreover, the website creation platform is just the tip of the iceberg. Since the platform already includes or will soon include CRM, marketing tools, blogging capabilities, accounting, and everything else that such small companies would want in an “all-in-one” solution. Durable raised $20.25 million for this task.
The startup Owner.com created a platform for independent restaurants to accept food delivery orders online.
This startup also started with a website creation platform, but their goal is to create a comprehensive solution. For example, the startup claims that their platform can become a full-fledged marketing team helping restaurant owners.
The startup focuses on small restaurant owners who are very unhappy that they are held hostage by food delivery aggregator websites. Essentially, their concept also resembles that of Shopify, helping online sellers break free from painful dependence on marketplaces. Owner.com raised $62.2 million to achieve this noble goal.
Thus, the second general direction is the creation of simple yet comprehensive platforms for small business owners who are still poorly digitized and who also do not want to become hostages of marketplaces in their markets.
As it turns out, there are still many such businesses. And if you start wooing them right now, you can still remake this market in your favor 😉
About the Company
Holdbar
Website: holdbar.com
Latest Round: $3.5M, 09.02.2024
Total Investments: $4.5M, Rounds: 2