Netactica booking in Latin American online-travel market

Latin America’s online-travel infrastructure is sorely lacking. But Netactica, an American-Argentinean startup, is tackling the problem.

According to online travel research firm PhoCusWright, the Latin American online travel market was highlighted in a recent study as one of the key growth regions, even as the U.S. online-travel market dipped 7 percent last year.

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Netactica has spent the last two years investing in a new technology platform and has seen accelerated growth of transactions within its current customer base while adding new marquee customers such as department store Viajes Falabella and the Bank of Chile (which owns a travel agency, TravelClub).  Thanks to new product sales and a sharp increase in new revenue streams (e.g., transaction-based fees), the company is projecting revenues of $10 million for 2013.

The 50-person company, with offices in the U.S., Argentina and Colombia, works with some of the largest online travel agencies and portals in the region, such as Despegar.com and Travelocity. Founded in 2003 by Guido Becher, a former employee of the short-lived New York City-based payments startup Flooz.com; Berkeley MBA graduate Gonzalo Arguello; and Australian Joel Spiro, Netactica has grown to $2 million in revenues under the trio.

Though the company has been profitable since inception, the management team will use the new funds to increase regional expansion and accelerate transaction growth through the company’s back-end exchange, called the Netactica Content Switch.   The switch connects systems such as Amadeus, Sabre and Worldspan with OTAs, hotels, airlines, portals such as Travelocity and traditional agencies.

One of the biggest challenges the company faces is the fact that a large percentage of the Latin American market is still behind the curve when it comes to digital automation. A large portion of mid-sized and small hotels has yet to upload their inventory to online travel portals and agencies.

In order to address this reality, the company has developed a host of products such as its Web-based Property Management System. In order to ensure that these smaller players can more easily upload their inventory, Netactica has developed these back-end automation offerings.  The additional funding that the company is seeking will allow them to aggressively price these solutions and get completely new inventory running through the company’s exchange.

Just as Priceline has been able to penetrate the Asian market through its Agora and Booking.com acquisitions (both of which boast substantial lodging inventory in Asia), Netactica understands that adding inventory is imperative.  In order to do this successfully in a region such as Latin America, they have become an end-to-end travel software provider complete with tariff calculators and configurable rules engines. ITA Software has become invaluable at providing booking functionality to portals such as Bing Travel and is even rumored to be a Google acquisitione target. Netactica hopes to position itself similarly in Latin America.