Skift Take

Steve Singh is continuing to build and fund an ecosystem that he hopes will bring about a more high-tech experience for the next generation of business travel. Otto will have to work out the rough edges of other AI trip planners to date.

Justin Dawes

Steve Singh and a group of industry veterans are rolling out a new AI trip planner and booking agent for business travel. 

It’s called Otto, and the startup shared its plans on Thursday along with news of a $6 million seed round.

The founder and CEO is Michael Gulmann, former senior vice president of consumer products for Expedia Group, and also the former chief product officer and head of marketing for Egencia. 

Madrona Ventures led the round, with support from Direct Travel and a star lineup of travel industry veterans. 

Singh, managing partner for Madrona, led the investment from the firm and is the executive chairman of Otto. 

The angel investors include:

• Erik Blachford, former CEO of Expedia 
• Barney Harford, former CEO of Orbitz and board member of United Airlines
• Hugh Crean, former CEO of Farecast, a Madrona-backed airfare prediction company that was acquired by Microsoft in 2008

Singh, who founded Concur and sold it to SAP in 2014 for $8.3 billion, and a group of investors in April fully acquired Direct Travel. (Christal Bemont, the company’s new CEO, is speaking at the Skift Global Forum next month.)

What Is Otto? 

Otto has been designed as a virtual travel agent for planning and booking business trips, with the ability to provide support during trips if flights or plans change. Powered by the latest generative AI models, users will be able to prompt a search with natural language. 

Much of the inventory is coming through a connection with ​​Spotnana, another Madrona-backed company with Singh as its executive chairman.

Gulmann said Otto will also be able to handle details like finding a hotel with specific amenities and within walking distance to a conference center. The tool is meant to learn and remember user data like a favorite airline, frequent flight routes, and preferred hotels.

The startup will add features for booking restaurants and more in the future, it says.

The focus is on the “unmanaged” sector of business travel — individuals, maybe small business employees, that don’t work with a contracted travel agency, Gulmann said.

“This, then, can become their pseudo [travel management company],” Gulmann said. “Otto should be able to be that cost-effective way that they can get more of that personalized service.”

The unmanaged market is worth an estimated $156 billion in the U.S., according to the startup.

“So the concept is, if we can capture even just 1% of that, it’s a $1.6 billion market with $120 million in annual revenue,” Gulmann said.

As other AI-powered planners have shown, the tech is imperfect at this point.

That’s why the team is spending the next several months working out the kinks, Gulmann said, with plans to launch a beta version of the platform in December. 

The startup has enough capital for two years of operations, Gulmann said.

How Otto Came to Be

Otto was born in a five-minute pitch during an internal offsite meeting for Madrona Venture Labs, the venture capital firm’s incubator program, according to a statement from Labs CEO Mike Fridgen.

Singh liked the idea and worked with the Labs team and Madrona Ventures managing director Matt McIlwain to develop the product vision, customer target, and business model. 

The Labs team included Simon Tam, founding chief technology officer of Egencia, and founding leaders for the former Farecast company.

Gulmann was also part of the development team. He became the founder and CEO when Otto was established as an independent company earlier this year. 

Madrona Venture Labs says it has helped establish more than 30 companies that have collectively raised over $270 million.

Otto was conceived to align with Singh’s long-term vision of “the perfect trip,” or as others in the industry call it, “the connected trip.” It’s the idea that all travel companies involved in a trip should have easy access to that traveler’s data, with permission, which would theoretically enable a more seamless experience for the traveler. 

Before his corporate roles, Gulmann spent about 10 years at startups. He decided to return to his roots because he’s optimistic about what the latest advancements of AI could mean for travel. 

“I had the opportunity to go into another big corporate job,” Gulmann said. “Honestly, this is something I’m just passionate about. This is the right moment.”