Alon Stern and James Hedley, co-founders of TurnStay. Photo: SUPPLIED
Cape Town-based travel-focused fintech –TurnStay.com – has secured $300 000 (more than R5.4 million) funding from Silicon Valley and New York-based investors DFS Lab and DCG.
The company plans to use the funding to expand the business into Africa and build on the significant traction already achieved.
Founded by experienced entrepreneurs Alon Stern, co-founder of Slide Financial, and James Hedley, co-founder of Quicket, TurnStay radically reduces the cost of getting paid for African merchants and platforms in travel and tourism by harnessing the same “tricks” used by the world’s biggest booking companies.
Stephen Deng, general partner at DFS Lab, said they back founders who use tech to redefine what’s possible in African digital commerce.
“TurnStay was building a much-needed offering for the African travel and tourism industry, one that unlocks substantial cost-savings for hospitality businesses across the continent,” Deng said.
“We believe the founders are the perfect team to tackle this opportunity, combining deep industry experience with a proved history of shipping market-leading products.”
Getting paid can be expensive in the travel industry, as payment fees and fees levied by online travel agencies are added.
For example, when a European customer books a South African hotel through booking.com the website bills the card in euros in Europe with a card fee of around 0.3% compared to more than 7% if the client’s card is billed using an African payment company.
“The average merchant spends 12% of revenue on getting paid – often this can be the difference between making a profit or loss and dramatically affects the viability of many businesses in a sector that employs over 6 million people in Africa,” said Hedley, TurnStay co-founder.
Stern, TurnStay CEO, said securing funding from these US investors was a vote of confidence in their business model, which has already processed more than R50m in transactions.
“TurnStay’s solution has reduced costs for some clients by 70%, and halved the number of unnecessary failed transactions. With a better checkout experience, sales conversion rates soar,” Stern said.
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