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COVID-19 bruised TripActions’ business. It chose to innovate.

If nobody's booking business flights through your startup, why not help people pay for their corporate takeout instead?

COVID-19 bruised TripActions’ business. It chose to innovate.

TripActions had to confront a world with far less travel.

Photo: TripActions

TripActions was a fast-growing startup that helped clients manage their business travel when the pandemic hit early last year. Now, almost a year later, it's also helping businesses with their work-from-home expenses.

Chief financial officer Thomas Tuchscherer compared what happened last spring to being in a speeding car that was forced off a cliff — a terrifying experience shared by most travel industry companies hit hard by the COVID-19 crisis.

"All of a sudden the ground vanishes, so you're flying off in this car that's not supposed to fly," he told Protocol. "It was scary while the car was up in the air, not knowing how to land it. But it forced us to focus and invest in areas that really mattered."

A major area the startup focused on as COVID-19 took hold is TripActions Liquid, a line of credit it launched last February to help clients finance their business travel. On Thursday, the company said it's expanding the service to cover a broader range of expenses at a time when business travel is still largely down.

While TripActions Liquid was mainly used to pay for clients' flights, hotels and car rental expenses when it first launched, clients can now also use the service to pay for non-travel business needs that are more relevant in the era of remote work, general manager Michael Sindicich said.

"The type of spend shifted," he told Protocol. "You're not spending on travel as much, but you're still spending on a lot of other business areas ... A lot of it is for digital advertising, it's software spend, it's work-from-home furniture. You see a lot of DoorDash. You see, now that we're just coming off the holidays, a lot of gifts to employees."

Sindicich said the startup is "leveraging a lot of fintech and different tools" to enhance the ability of businesses to manage their expenses. TripActions Liquid, for instance, uses AI to quickly approve expenses and process payments.

Tuchscherer said the decision to expand TripActions Liquid to cover expenses beyond travel was also "driven by a natural expansion to capture more spend, and also to become more strategic" to clients' finance teams, including the CFO.

"If you're only truly present we can only talk about travel, you may be speaking only with the travel managers," he said. By expanding to other expenses, "you move up the finance stack and you start speaking with more strategic financial employees, including controllers, including CFOs."

TripActions launched the line of credit in February 2020 with $500 million in debt financing from Silicon Valley Bank, Goldman Sachs and Comerica. Initially, it was geared toward making it faster and more convenient for businesses to use the TripActions travel management platform.

But then the COVID crisis caused travel bookings to plummet by as much as 90% last spring. TripActions was forced to cut costs, including a major round of layoffs, Tuchscherer said.

"We had to take the very difficult decision of letting go about a quarter of the company back in March," he said.

The company has started to bounce back as some business travel also resumed. It also began expanding the scope of TripActions Liquid, which has become the startup's fastest-growing business.

Meanwhile, investor interest has also remained strong. In June 2020, at the height of the pandemic, the company, which had raised $250 million the previous year at a $4 billion valuation, raised another $125 million from investors led by Greenoaks Capital, boosting its total tally to $600 million. The new valuation will be set when TripActions goes public, Tuchscherer said. He declined to set a timeline for the company's IPO.

Jonah Crane, a partner at the fintech-focused investment firm Klaros Group, said TripActions' decision to expand its financing business shows how startups can tweak their business model, especially during a crisis.

"It's a good example of that broader trend where a company will often start getting traction in solving one problem for your customers and then say, 'Hey, we can also, we can also help you with this other thing,'" he told Protocol.
Politics

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More antitrust laws and bridging the digital divide should be top of mind for the incoming administration.

Antitrust enforcement is one of the big lessons going into the Biden administration.
Photo: Alex Edelman/Getty Images

Although it is too soon to tell with certainty how President-elect Joe Biden will address the questions surrounding tech policy, it is clear that his inaugural transition on Wednesday will affect the world of tech.

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Penelope Blackwell
Penelope Blackwell is a reporting fellow at Protocol covering ed-tech, where she reports on the decisions leading up toward the advances of remote learning. Previously, she interned at The Baltimore Sun covering emerging news and produced content for Carnegie-Knight’s News21 documenting hate and bias incidents in the U.S. She is also a recent graduate of Columbia University’s Graduate School of Journalism and Morgan State University.
Protocol | Enterprise

Why Oracle and SAP are fighting over startups

Did someone mention a chance to burnish reputations and juice balance sheets?

New cloud-based offerings and favorable contract terms are convincing startups to switch to software from Oracle and SAP earlier in their lives than your might expect.
Jane Seidel

In the hunt for their next big-ticket customers, SAP and Oracle are trying to cast off reputations as stodgy tech providers by making a huge push to provide their software to startups.

Both companies have found themselves in choppy waters recently as potential customers have turned to the cloud, shunning the on-premises solutions SAP and Oracle are known for. That's coupled with a global pandemic that dried up demand for the expensive enterprise-grade software that drives profits at the vendors.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Is this a VC bubble, or just the new normal?

Huge deals, little diligence and hyper-fast follow-on rounds have become commonplace. For now.

Things are looking awful frothy, aren't they?

Photo: Drew Beamer/Unsplash

The VC industry is "frothy," "overheated" or "bonkers," investors say. Whether this is the new normal or unhealthy signs of an overheated market depends on your point of view — and how well your portfolio is doing.

There are signs that VC has changed all around. In recent months, deal sizes and valuations have spiked in hot deals; due diligence on startups has evaporated as investors compete to get into hot deals first; venture firms are investing much more than they normally do; there are hyper-fast follow-on rounds; and more non-traditional investors are backing early-stage startups.

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Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Big Tech is cutting off political contributions. Here are the biggest losers.

Election objectors like McCarthy, Nunes, Jordan and Stefanik all took tech PAC money last year. But they're not the only ones losing out.

Some of tech's biggest critics in Congress have taken money from tech PACs. Now, they're getting cut off.

Photo: Darren Halstead/Unsplash

One day after Twitter banned President Trump and Google and Apple kicked the far-right social network Parler out of their app stores, New York Rep. Elise Stefanik dashed off a tweet: "If you think the American people will quietly accept #BigTechTyranny, You. Are. Wrong."

One detail Stefanik left out: She took $30,000 from corporate PACs linked to Facebook, Google, Microsoft, Amazon and Intel in the last year alone, according to campaign finance records. During her tenure in Congress, she's raised nearly twice that much from those companies. And now, she's getting cut off.

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
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Affirm takes 'buy now, pay later' public today. Investors may balk at the risk.

The San Francisco startup's rise highlights the rapid growth of payment and lending platforms, especially among millennials.

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Affirm's IPO, which could value the company at a reported $10 billion, highlights the rapid growth of ecommerce and related payment and lending platforms amid the pandemic, as well as new ways that consumers, particularly younger ones, seek to make purchases: Many are eschewing credit cards to avoid going into debt.

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Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

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