For good or bad, venture funds are flowing like it’s 1999 all over again. Seattle-based Farecast , which predicts and guarantees airline prices, dipped its toes in the cash pool for its third round of financing, taking $12.1 million from Sutter Hill Ventures and others. Previous investors Greylock Partners, Madrona Venture Group, and WRF Capital also participated, as well as new investors PAR Capital Management, Pinnacle Ventures, and Farecast board member and former Expedia CEO, Erik Blachford.
The company has now raised $20.6 million over three rounds. How are they doing? The model seems to be attractive to consumers. Farecast VP Marketing says in just the last few months since launch they’ve “dropped off $200 million in “potential” revenue to airline websites,” a fraction of which will have resulted in actual sales.
Wow, 20 mil. Seems like an enormous amount of money for such a site.
Also, its going to take quite a bit for someone to pull me away from Kayak.com
I flippin love that site!
Wow, that does seem like quite a bit for such a service. I just hope that investors are diversifying and not putting everything into one basket.
However, at least it’s a real business model and not the n’th widget hoping to be the next billion dollar buyout.
It’s more of a feature than a service.
If need > concern for cost then this service is worthless. When I visit kayak.com and figured out the cost for a ticket, I think in the back of my mind: “sure, it would be awesome to figure out if I’m buying a ticket for the best price in the season” but then go on to do something else that’s worth my time. Anything below a $100 dollars variance for a round trip ticket will yield little or no concern from the typical consumer.
They might as well just give away 100 dollars for tickets.
Note to posters (and commenters):
it’s = contraction (it is)
its = possessive (his, hers, its)
Thus: …it’s 1999 all over again… dipped its toes for its third round…
I love the blog, but I cringe at it’s egregious errors on a regular basis. Your to good for this!
Michael (5)… he who can’t see past the mistakes of others is a blind man.
Owww! So Mike, do you already have web2.0 bust strategy? May I propose “officecrunch” ?
wow… kayak.com kicks ass. Thanks I never knew. I love the map feature.
have no idea about what the 20 million is going to…cause i’m not even going to check out farecast.com. serious. kayak.com kicks ass.
I usually use kayak, but for my last flight I decided to check farecast.com and it found options that were $150 cheaper, right then.
So, I don’t know about the prediction technology, but atleast that one time, it beat kayak just for finding best current price.
And that’s what matters– I love kayak too, but if farecast gives me cheaper flights, I’ll use that.
$20.6 million and they’re not out of “beta” yet?
@Pamela Fox…
hmmm…I’m calling your bluff…see, I know the CEO of Excite and they own a whole travel section; I’m also ole school and know that all the reservation systems use the same system developed by IBM in the 70s…so essentially, they all come out with the same results, b/c they all have the same information.
http://en.wikip...org/wiki/Sabre_(computer_system)
just found a bug in word-press; the url for Sabre got cut up eventhough it was cut and pasted from the browser.
Kayak is really cool. Thanks for that mate!
Sorry to whinge about it but Farecast doesn’t do countries i.e. its only useful if you are travelling between Stated in the US. What about Us, Poor souls in England, Europe,…..?
“Sutter Hill Ventures and others. Previous investors Greylock Partners, Madrona Venture Group, and WRF Capital also participated, as well as new investors PAR Capital Management, Pinnacle Ventures, and Farecast board member and former Expedia CEO, Erik Blachford.”
So what is left from the company? 10% tops?
A formatting suggestion:
It would be really useful to know from the headline for each story where the featured website/service is available and if invited beta/whatever. Maybe indicated in a similar type size/font/place as the author’s name.
It would make it really to know which startups/stories are the most relevant and able to access from the beginning.
Plus it would save the author having to write this down in a sentence or two each time when they could just have the abbreviation: ‘Private Beta’ or ‘USA’ where users were in any way restricted in using the website.
(4) – It’s great feature. This will be apart of every booking engine in five years.
My favoured place for such an abbreviation might be on the same line as the headline but ranged right so above the green header for the number of comments.
This is NOT working the way they’ve expected. There is no “hockey stick” in their traffic growth.
(18) – That’s why they are taking more money..
Note to (5) Michael “Your to good for this!”
I love your comments, but I cringe at your egregious errors on a regular basis. Your too good for this!
I love farecast, I really believe they are bringing a great twist to the online travel market
It’s “You’re too good for this”.
Farecast is good, but I still prefer SideStep.com. I don’t have the same bookability issues with SideStep that I do with Kayak, and to be frank, Farecast needs to get its accuracy ratio higher before I’ll do any real business with them. Sticking with SideStep.
Agree w/ Carol. I’m still in love with the original metasearch guys at SideStep – they consistently give me better prices than anyone else out there, including Farecast.
What people do not realize is that Farecast CANNOT scale. Think about it – it is telling you when to buy air tickets. As soon as it reaches critical mass, it will no longer be able to make such prediction, because (hopefully, for them) most potential purchasers will use that service too! Do you get it? I don’t think I did a good job explaining this, but the those of you with a brain can figure it out from here.
Note to R.T. (20), Seth (22), and anyone else who’s misplaced his sarcasm detector: all three mistakes in “I cringe at it’s egregious errors on a regular basis. Your to good for this!” were intentional, including (obviously) the recapitulation of the “it’s” error itself.
But I still love TechCrunch. (That’s for you, Robert (5).)
Actually, that would make me Robert (6)
20 millions? Jesus! So much money for a simple site like this one :S
i say it again, i don’t know how venture funds companies invest like this, millions and millions, on things that soon or later will without any doubt be dead or too unlucrative. Maybe venture funds companies like to loose money? who knows…
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