After 8 years in business, travel planning startup Utrip shut down earlier this year. The company, which provided itineraries curated by AI and experts to travelers to places across the world, was in the midst of being acquired by a large and unnamed travel company, but the deal fell through at the last minute. The company had successfully raised over $4 million just two years prior in 2017, but in 2018, founder Gilad Berenstein decided that they needed more funding to expand the company. After trying to get about $8 million in investment, it didn’t seem like any major funding was going to materialize. They then decided to consider being acquired, which is where it all fell apart.
In the years leading up to its collapse, Utrip had become quite successful, with over eighty paying clients and promising technology. When we interviewed founder Gilad Berenstein almost two years ago, he told us that he wanted to license the software to more companies to grow the user base for their unique AI interface, which in many ways was successful. They had signed on with large forces in the travel industry, like JetBlue and Holland America, and had won contracts with regional tourism agencies across the country. Nevertheless, its momentum was not enough to keep the business sustainable.
Utrip’s successes and sudden demise hold valuable lessons for other startups. Berenstein told Skift that the company had spread itself too thin trying to serve many small clients. Although numerous, these small clients did not pay enough money for the company to be profitable, and scared potential investors away. In addition, the demise of Utrip highlights another trend in the travel industry. Trip-planning startups have a notable high rate of failure within the travel industry according to Skrift, because it can be difficult to break into so many sectors and product types at once. In the end, it is unfortunate that Utrip did not succeed in the end, but its failures prove to be a valuable lesson in what not to do.