Utu, a travel tech company, has announced that it has raised $35 million in a Series B funding round led by SC Ventures. The funding will be used in part to acquire CardsPal, a fintech company based in Singapore that provides users with nearby deals and promotions.
During the pandemic, utu focused on establishing partnerships with travel, hotel chain, and retail brands. The company recognizes that only a small percentage of venture funding has gone towards the travel industry in recent years, with the majority being directed towards short-term rental hospitality. Utu aims to bring innovation to the tax-free shopping sector, which allows tourists to reclaim VAT on their purchases.
Utu offers customers a Tax Free Card, which provides two main options. Customers can choose to receive frequent flyer miles or hotel points instead of VAT refunds, or they can opt for an immediate store voucher equal to 120% of the VAT or GST they paid while shopping overseas. According to Utu, partnering retailers, airlines, hotels, and other organizations can increase customer loyalty and grow their revenue from tourist shopping by up to 40%.
Utu’s partners include major airlines such as Air France-KLM, Emirates, Qatar Airways, and Singapore Airlines, as well as European hospitality brand Accor. The company works with fintech partners Nium for payments and utilizes its own proprietary technology. Utu plans to announce more partnerships later this year.
While customers typically reclaim VAT through operators like Planet or Global Blue, they do not receive the full amount back, which is where Utu comes in.
Utu co-founder Asad Jumabhoy has spent years in the duty-free and tax-free shopping industries. After selling his previous venture, Global Blue, Jumabhoy decided to create Utu to provide more value to tourists during their tax-free shopping experiences.
Jumabhoy explained that tax-free shopping still has two major problems: the difficulty of getting VAT refunds and tourists only receiving a portion of their VAT spending back. Utu focuses on addressing the latter issue and aims to provide tourists with more value when they shop, such as receiving over 90% of their refund value in airline frequent flyer miles.
The acquisition of CardsPal will give Utu access to a digital marketplace, a promotions engine, and a self-service merchant registration portal. It will also expedite Utu’s expansion into markets like France and Italy, as well as other countries that offer VAT and GST refunds.
The funding received by Utu will be used to expand their product distribution across all countries with VAT refund services, invest in technology and new products, and strengthen their management team to support their growth plans.
