Steve Singh moved still deeper into his vision for business
travel on Thursday, announcing a $6 million funding round for Otto. The funding
was led by Madrona Venture Group with participation from Direct Travel, also in
the Madrona portfolio, as well as from angel investors from across the business
travel industry, with resumes that include C-suite titles at Expedia, Orbitz, Uber,
Operix and Farecast.
Otto is being positioned as an artificial intelligence-powered
travel agent. Michael Gulman, a former Expedia product executive, is the founder
and serves as its CEO.
It’s targeted directly to business travelers, particularly
those in smaller companies that are not necessarily managing travel but want to
access some of the benefits of a managed travel program. Singh wrote in a blog
on the Madrona website that such companies and travelers (and there are a lot
of them) are underserved by the options in the market today.
Referring to travel management companies—including Direct
Travel, which Madrona acquired this year—he wrote, “…today, those companies and
systems do not cost-effectively serve smaller companies and individuals in
those companies. While the needs of smaller enterprises are different, the need
to manage their travel spend and travel program is just as important.”
While the tech details weren’t abundant in the announcement,
based on Singh’s blog post, the AI agent will learn traveler preferences and
patterns over time, and its algorithms will then return booking suggestions
that meet parameters as shaped by historic bookings. Otto may also include some
limited policy levers. The AI agent will address flights and hotels and also
will serve up restaurant reservations. With search powered by AI large language
models Otto will have the the ability to deliver specifics like only searching
for hotels with rooftop bars or restaurants with private dining areas. It will
recognize conversational language in spoken or written requests to initiate searches
and bookings. Based on Singh’s description, it will integrate with calendars to
understand the user’s scheduling and availability.
How—or if—reporting or other traditional travel management
features might be built was not clear, but Singh did write in his blog that
Otto will leverage the open architecture of Spotnana, Troop, Center and Direct
Travel.
Otto comes out of stealth with a pedigree burnished by big
names in travel and is clearly part of Singh’s steadily expanding empire addressing
the needs of business travel. With Otto, AI now is fully in play to serve the smaller
market and ensure revenue margins that people-powered agencies could not.
Gulmann and Singh said in a TechCrunch interview that their content
streams combined with off-the-shelf AI models, tuned with Otto’s travel data,
will enable them to capitalize on affiliate revenue per booking. Regarding AI “hallucinations,”
which would run the risk of booking travel options that don’t actually exist,
the pair said the AI will be calibrated to cross-check its own work and if it
meets a threshold of uncertainty, the booking would be bumped over to Direct
Travel for human agent assistance.
All that said, Otto is just out of “stealth” at Madrona
Venture Labs. It is now in alpha mode with select users and is looking to go
into a broader beta testing by the end of the year, and a full rollout in the
first quarter of 2025.
