Small businesses and startups often lack a dedicated travel desk, forcing executives and founders to rely on human assistants or consuming and cumbersome travel apps.
Expedia’s former SVP of consumer product, Michael Gulmann, is betting on AI to bridge the gap. His company, Otto, emerges from stealth Thursday, with plans to launch an alpha version of the platform to select U.S. participants in September. The service is designed to quickly facilitate flight and hotel bookings through natural language queries.
Otto has raised $6 million in a seed round led by Madrona Ventures, with participation from Direct Travel. Angel investors in the round include former C-suite executives from services including Expedia, Ortbiz, Uber and Farecast.
The startup will utilize the $6 million it has raised for product development and hiring engineering talent. It should give Otto a run rate of two years.
Gulmann told TechCrunch that while the likes of TravelPerk and Concur focus on large enterprises, Otto is looking to serve customers who lack access to the services.
“Think of Otto as a high-end travel agent or executive assistant that remembers your preferences, such as your choice of hotels and flights. It will also remember other nuances such as if you prefer to stay within 10 minutes of your meeting place,” Gulmann said.
He noted that this means users don’t have to re-enter preferences each time they use the service. They also don’t have to toggle between travel sites and services like Google Maps.
Gulmann added that Otto automatically looks for changes in bookings and schedules. For instance, if your preferred hotel is booked, it gives you an option for another hotel that’s nearby.
In instances where the ‘bot can’t complete the booking for some reason, it will hand over the operations to a human agent at Direct Travel, who will pick up where it left off. Gulmann explained that these cases will likely be rare, though it’s difficult to gauge frequency without more real-world testing.
Steve Singh, Madrona’s managing director and the interim CEO at travel tech firm Spotnana, led Otto’s seed round. The exec, who also founded Concur, acquired Direct Travel (one of the investors in the round), with various other investors in April. Singh is the executive chairman at Direct Travel and will assume a similar position on Otto’s board.
Speaking with TechCrunch, Singh said he believes Otto has a great opportunity to capture some market in the travel space.
“The reason behind a large set of business travel being unmanaged is that services like Concur or other travel management companies are too expensive for small businesses. Typically, small business owners take the help of executive assistants for travel. That’s what’s good about Otto, it acts as your own executive assistant or a travel agent,” he said.
Otto is using its network of investors and advisors to get the best flight and travel data — integrating with services like Direct Travel and Spotnana — to facilitate customized booking queries.
Gulmann said that, for instance, if you need a hotel with a rooftop bar, you won’t find that as a filter on Expedia or Booking.com. He said that Otto is leveraging various hotel data providers and airline schedule databases to provide better customization for users.
The company is currently fine tuning off-the-shelf AI models using their own data. Gulmann noted that the cost of using these models will be far lower than what the company will earn from affiliate revenue per booking.
Otto plans to let the bot book transactions, anonymize trip IDs, and analyze data to check for hallucinations or errors. It emphasized that because it uses different agents and models for different tasks, the number of hallucinations should be small.
Gulmann said that with the alpha release, the company plans to hone its product, aiming to open it up to more people through a beta release by the end of the year. He plans to make Otto more widely available in early 2025.
Singh adds that, in the future, Otto will be able provide a highly personalized service. Users would be able to say as little as “Book me a trip for my next week’s meeting” and the tool will plan a trip based on historical data and preferences.