Wednesday 11 September 2019

Snap pivots to get wheels back on the road

logoWhen Thomas Ableman, founding CEO of low-cost coach booking startup Snap, called me back in June to say that he was ‘pausing’ operations due to a cashflow issue (see Snap stretched!), I honestly thought that he’d never get the wheels back on again.

But I am delighted to say that another call from Ableman yesterday revealed that he’s relaunching operations at the end of the month after pivoting the business model in order to raise new funding.

When Ableman launched Snap (then Sn-ap), he took the risk on the bookings, paying coach operators a fixed fee to run a journey no matter how many passengers had booked. This was great for Snap when a coach was near capacity but not so great when it wasn’t. The ‘pivot’ changed the business model to a more straightforward marketplace, in which Snap pays the coach operators a percentage of the ticket fees. However, Snap still sets the fares.

As a result, prime backer Accelerated Digital Ventures has tossed some more dosh into the kitty along with new and current angel investors. Ableman also intends to launch a crowdfunding round to give customers a chance to get a slice of the action.

With the pivot, Ableman has traded off margin upside for reduced risk. A sound decision given that the risk nearly wiped out the business.

Posted by: Anthony Miller

Tags: funding   startup  

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