Grant Bradley

Aviation, tourism and energy writer for the Business Herald

'Land grab' for travel tech: Serko

Co-founder of booking management software company preparing to float says key to success is to stay nimble.

Serko co-founder and chief executive Darrin Grafton. Photo / Richard Robinson
Serko co-founder and chief executive Darrin Grafton. Photo / Richard Robinson

Serko co-founder Darrin Grafton says there's a "land grab" for travel management software business.

He should know, he's been in the field for close to 25 years and is on the brink of taking the company public to help fund expansion in the Asia-Pacific region.

"It's a land grab at the moment, the market is ready - now is the right time, our travel management companies are saying, 'Get into these markets with us'."

The 44-year-old said there was pressure on tech companies to do everything fast, especially protecting their intellectual property.

Following the Oracle model, Serko would provisionally patent its technology as it was launching into the market.

Serko has announced plans to float on the NZX main board on June 24, which will raise up to $22 million.

Grafton will retain a 20 per cent stake in the business, in which he and co-founder Bob Shaw have invested "millions of dollars" during the past seven years.

The software allows travel management companies to better manage bookings for their corporate travellers connecting to airlines, as well as hotels and rental cars and allows the user to make online bookings based on the company's travel policy.

The company clips the ticket on an around US$3 billion ($3.5 billion) in travel spending across the Asia Pacific and forecasts $11 million in revenue for the financial year ending March 2015. It is about to launch a mobile application for corporate travel for which it will charge a premium. It also offers a cloud-based travel expense system for a monthly subscription of $8.

Grafton said he started developing travel booking technology straight out of Carrington Polytech, the forerunner to Unitec.

He and Shaw spent several years developing their first product, Interactive Technologies, in the mid-1990s, then Web Inheritance for low-cost air fares search in 1999, before building an early version of Serko.

After becoming part of the listed Gullivers Travel Group, which was in turn bought by MFS, Grafton and Shaw bought back the Serko assets in 2007 and rebuilt the technology, adding new features in preparation for listing.

Serko hits the market within a day of Gentrack, another tech company, but one with its earnings linked to the performance of utilities such as power companies.

In spite of tech company shares taking a beating on the market this year, Grafton is putting on a brave face expecting a bounce-back.

In 2007 Grafton and Xero founder and chief executive Rod Drury shared the NZX Entrepreneur Award.

Grafton is realistic about the level of competition, Serko is up against multi-billion dollar multinationals based in the United States and Europe.

The key was keeping nimble, Grafton said.

Growing up on a dairy farm at Waimauku northwest of Auckland taught him to be adaptable.

"You work with what you have. If you've got a problem you fix it with what you have, especially if the shops are closed," he said.

"It's the same mentality here, every problem has a solution, you break it down and build it back up."

Darrin Grafton

• Co-founder and chief executive of Serko.
• Aged 44.
• With partner Donna has four children aged 7 to 15.
• Lives in Remuera.
• Outside work, likes playing tennis, stand up paddle boarding and fishing.

- additional reporting Holly Ryan

- NZ Herald

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