During his junior year study abroad, Max Morganroth, traveled to 30 countries, primarily flying in business and first class. His jet-setting was funded almost entirely by airline points he collected through strategic credit card applications and miles redemptions.
Morganroth told TechCrunch that just about everyone he knew was “begging” him to teach them how to get free flights through airline miles programs, a term he calls “travel hacking.” However, most people in his circle, including fellow Wharton students, either didn’t qualify for the best airline rewards credit cards or lacked the time to maximize their mile conversions for optimal flights.
By marketing credit cards and sharing fees with banks, frequent flyer programs have become significant revenue generators for airlines. But according to Morganroth, about 70 million Americans don’t have sufficient credit history to access these reward schemes.
During his travels, Morganroth discovered that in Hong Kong people don’t need to open credit cards to earn miles on Cathay Pacific’s Asia Miles program. “Miles there are treated like a second currency,” he said. “You go to 7-Eleven to buy a water bottle; you earn Asia Miles. You can open a bank account and earn cash interest, plus miles on your savings. You can even sell a property for part cash, part miles.”
Morganroth saw an opportunity to create a program similar to Asia Miles, where consumers could earn miles on various airlines when they shop in certain stores. His proposition to airlines was that they could tap into a larger consumer demographic, particularly Gen Z, a generation eager to travel but still lacking established credit.
After graduating, Morganroth, now 22 years old, teamed up with Arhan Chhabra, a Harvard dropout, and the duo set out to build Rove, a startup that claims to be the first universal mile loyalty program.
Of course, it’s not exactly the first and only. American Express’ rewards program, for instance, lets users redeem points with multiple airlines, and sites like Expedia offer points that can be used for various airline flights. But multi-airline programs are still a rarity.
Rove entered the Y Combinator’s winter 2024 batch and proceeded to fly around the world, where they struck partnership deals with the mile programs of 11 airlines, including Air France-KLM, Aeromexico, Finnair, and Qatar Airways.
These partnerships, which were previously only available primarily to credit card issuers of the major banks, helped Rove raise $2 million from investors, including YC, General Catalyst, and Soma Capital.
Rove’s loyalty program allows airlines to expand the lucrative business of miles to millions more consumers, Morganroth said.
But instead of allowing airlines to share fees with credit cards, Rove gives them a way to make money through affiliate marketing with over 7,000 merchants through the Rove shopping extension for Google Chrome. That’s a business model that’s similar to Honey and Rakuten.
Morganroth explained that the points earned from shopping can be converted into airline miles, which hold more value than their equivalent in cash.
In addition to the affiliate marketing scheme, Rove also offers its users miles for hotel bookings.
In fact, Morganroth said that the points from a $1,000 hotel stay could be worth a round-trip ticket to Europe from the United States, a flight that could then be used for the same trip, if the hotel booking is nonrefundable. Hotel bookings are so valuable because some hotels share as much as 40% of their sales as commission. Instead of pocketing that profit, Rove gives all of its share of those earnings to the user in the form of miles.
Users can combine Rove miles earned on hotel bookings with miles from the shopping extension and even credit card miles if they have a card that earns airline points.
The startup’s elaborate scheme may seem complicated, but Morganroth says that earning miles through Rove is straightforward, as long as users book hotels on its platform or shop using the Rove shopping extension.
When users are ready to book flights with their miles, Rove’s travel portal helps them find the best award flight deals. And while Rove partnered with only 11 airlines, the startup’s users can book award travel on about 140 carriers because it is often possible to transfer miles of one airline company to its affiliates in another region.
Rove is available to anyone, but Morganroth believes its offering is the most attractive to young adults.
“Gen Z wants to travel more than any other demographic, yet they have the least access to the tools like this that actually make it cheaper,” he said. “They no longer have to wait until they’re 28, have five years of credit history, and $700 fee to get one of these cards; they can just download a Chrome extension, book any of their existing travel through us, and they’ll immediately be in the game.”