Tuesday, 27 June 2023, Bengaluru, India
UTU, a travel technology business that aids travelers in making the most of their tax-free shopping, revealed today that it had raised a $33 million Series B from investors, including SC Ventures. Additionally, Utu disclosed the acquisition of CardsPal, a Singapore-based fintech company that connects consumers with local discounts and promotions.
Utu tried to forge alliances with travel, hotel chain, and retail companies during the pandemic-caused travel ban. Even while the travel industry has recovered, more than 1% of venture capital funding over the previous 15 years has gone to travel, primarily short-term hospitality rentals, according to the business. The mission of Utu is to innovate in the field of tax-free shopping, which enables travelers to claim VAT on their purchases.
Customers can purchase a Tax-Free Card from Utu, which has two significant features. To start, tax-free buyers can choose frequent flyer miles or hotel points instead of VAT refunds. Alternatively, clients can get an instant store credit worth 100% of the VAT or GST they paid while making an international purchase. Retailers, airlines, hotels, and other businesses collaborating with Utu can boost consumer loyalty and up to 40% of their revenue from tourism.
One of Europe’s foremost hospitality brands, Accor, and ten major airlines, including Air France-KLM, Emirates, Qatar Airways, and Singapore Airlines, are among Utu’s partners. Utu employs its unique technology and partnerships with fintech companies like Nium to make payments more manageable. Later this year, further partnerships are anticipated to be announced.
Customers that purchase VAT in advance can reclaim it from companies like Planet or Global Blue. However, they do not receive the entire VAT refund, which is where Utu comes in.
Asad Jumabhoy, a co-founder of Utu, worked in the duty-free industry for eight years before spending another 25 years in tax-free retail. Jumabhoy launched a tax return company while running clothing and fragrance shops at Changi Airport in Singapore in the late 1980s and early 1990s. This company eventually became Global Blue. Jumabhoy decided to use his knowledge of retail margins, value-added taxes, and consumer shopping patterns to develop Utu after selling Global Blue in 2012.
Even if tax-free purchasing is a regular habit, there are still two issues, according to Jumabhoy. The first is that receiving a VAT refund can be challenging, and the second is that travelers only get reimbursed a portion of their VAT expenses. Utu concentrates on the second issue and seeks to provide more value to tourists when they shop. For instance, they may get more than 90% of the value of their return in airline frequent flyer miles.
With the acquisition of CardsPal, Utu will have access to a self-service merchant registration platform, a promotional engine, and a digital marketplace. Additionally, it will hasten Its expansion into markets like France and Italy and another 50 nations that provide VAT and GST refunds.
Utu will use the cash to expand its product distribution throughout all nations that provide a VAT return service, invest in new technology and products, and improve its management to carry out its growth strategy.
[Source of Information: Techcrunch.com]
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