Skybuys is pitching to investors as it prepares for takeoff in the global duty free market
Link copied to
The term “travel tech” is perhaps a less commonly-heard phrase within the realm of financial technology.
But according to Sydney-based startup SkyBuys, global travel retail is a $75 billion market, and the company is positioning itself to get a piece of the action with the rollout of its duty-free shopping app.
Founded by Alec Kemmery at the Stone & Chalk fintech hub, Skybuys is built around providing duty free shoppers with increased flexibility.
Instead of just buying at airports or retail outlets, customers can buy goods any time; from the point plane tickets are purchased to when they reach their destination, including in-flight.
Having partnered with global duty-free chain Heinemann, the company is now raising capital for its next phase of growth.
Kemmery is looking to close a $1.5m investment round by the end of July, based on an indicative valuation of $6.5m.
To start building its footprint, Skybuys partnered with the Australian division of Heinemann which holds the exclusive duty free licence at Sydney airport.
The two sides are now working together to onboard the tech and match up operating processes. If Sydney is successful, the company plans to shift its rollout to Gold Coast airport, where Heinemann recently secured a seven-year contract for two outlets.
Skybuys adds value for duty free concessionaires by streamlining the sales process and facilitating product collection so passengers don’t need to queue at checkouts.
“For duty free outlets, their retail offering is strong but they have a lot to catch up on from e-commerce,” Kemmery says.
“This will change rapidly though. People in the market are expecting the big tech players to make a significant push into this industry, particularly in the area of online distribution.”
Around 5,000 hours of product development have gone into the Skybuys app, which is patent-pending across a global jurisdiction.
Skybuys established proof-of-concept for in-flight functionality with Airbus last year and is available on both the App Store and Google Play. The initial revenue model is based on customer transactions, where Skybuys takes a clip from the vendor for each purchase.
The aim is to expand the service to other concessionaires and airports globally, running adjacent to a travel retail market which Kemmery says is expected to grow to more than $100 billion.
“Around one-third of those shoppers are using duty free, so there’s huge room to move the needle and we haven’t seen mobile retail technology come into the space.”
“We’d like to see it as a domino effect so if there’s a concessionaire with a network of 30 airports on the app, that means the opposite concessionaire is missing out.”
While it has big plans, Skybuys sits at the early stage of the startup growth phase and is currently pre-revenue.
But that hasn’t stopped the company getting some interest from the big players in travel-industry venture capital — a fact Kemmery attributes to Skybuys’ early business partnerships.
“As an early-stage startup we’ve had Heinemann on board, which is a global retailer with revenues north of $4 billion. So there’s been some big players in the room from the very start, which brings in interest from those VCs much earlier than other startups.”
For now though, the company is tapping its network of private offices and high net-worth investors, particularly those with previous experience in travel retail.
“That’s the type of groups we’re looking at to take us from 0-100 (km/h),” Kemmery says. “From the valuation ($6.5m) to the ask ($1.5m), it should be quite an interesting story for investors.”
Kemmery will use the funds to “scale and replicate the model globally, investing in the technology itself and building out our sales and marketing team”.