ASIA PACIFIC. Travel technology company utu has acquired CardsPal, a Singapore-based platform focused on localised rewards promotions, for an undisclosed sum. The move is part of utu’s drive to enhance its tax free shopping services offer.
The acquisition, said utu, will allow the company to accelerate growth by leveraging CardsPal’s mobile-first technology and incorporating its talent into the wider organisation.
It forms part of a US$33 million wider deal at utu that comprises the acquisition and a funding round. This consists of both a portion of new funding from SC Ventures (a unit of Standard Chartered), and the roll-over of earlier funding from Singapore-based investors who supported the company through the pandemic.
utu, which used the Covid hiatus to establish key partnerships with leading global airlines, hotel chains, and retail brands, will leverage the deal to scale its products globally.
A key element in the decision to acquire CardsPal, said utu, was SC Ventures’ support in incubating the start-up to become a full-fledged tech platform that utu can leverage to bolster its tax-free shopping offerings.
Asad Jumabhoy, travel retail veteran and Co-Founder and CEO of utu, commented: “The cross-border travel market is ripe for a technology-driven transformation, with tax-free shopping presenting vast untapped potential. By enhancing the value of VAT and GST refunds for travellers, we’ve reimagined the cross-border retail experience and devised a technology-based business model unlocking previously inaccessible value. This strategy benefits all stakeholders—brands, hotels, airlines, and VAT refund operators—while also enabling governments to compliantly recycle VAT refunds within their borders.”
In 2023, the travel industry is expected to reach US$9.5 trillion or 95% of 2019’s pre-pandemic peak, according to the World Travel and Tourism Council. Despite the turnaround, McKinsey reports that only about 1% of venture funding in the past 15 years has gone to travel, mostly in short-term rental hospitality.
The tax-free shopping sector, where tourists can reclaim the value-added tax (VAT) on their purchases, is especially subject to this innovation lag, noted utu. Tax-free shopping was designed to stimulate tourist spending, but the cost of refund processing has stymied its potential benefits for travellers, said the company.
Utu collaborates with refund and travel industry partners to enhance refund value through innovative B2B and B2C solutions.
By linking payments, rewards and shopping, utu said it introduces new value for tourist shoppers, retailers, VAT refund operators and the tax-free shopping value chain.
Travellers using utu’s Tax Free Card can gain up to +40% more value by opting for frequent flyer miles or hotel points over cash refunds. utu is also able to issue immediate store voucher equivalent of up to 120% of the VAT or GST paid during overseas shopping.
For retailers, airlines and others, partnering with utu could potentially increase their revenue from tourist shopping by up to +40%, claimed utu. The company currently partners with leading global airlines including Air France-KLM, Emirates, Etihad, Qatar Airways and Singapore Airlines. It also partners with Accor, Europe’s largest hospitality brand.
Incubated by SC Ventures, CardsPal’s technology and mobile-first technology talent will equip utu with a digital marketplace, a promotions engine and a self-service merchant registration portal.
It will also help with utu’s rollout in major tax-free shopping markets like Italy, Thailand, the UAE and some 50 countries offering VAT and GST refunds. Additionally, utu is planning to integrate CardsPal’s “hyper-localised retail experience” into an improved pay-with-points offer for its users.
SC Ventures Member Gautam Jain said: “CardsPal is a great example of why we at SC Ventures believe in the power of innovation and support our employees to have transformational impact. Through SC Ventures’ Intrapreneurship Program, CardsPal grew to become a business with award-nominated UX. We look forward to utu’s continued success scaling its products across the globe using CardsPal’s technology.” ✈
