‘Back from the brink’: Melbourne start-up ready to take on Google

The pandemic slashed this software company’s revenues by 90 per cent and threatened its future, now its CEO says the near-death experience has made it stronger than ever.

Two years after the pandemic slashed revenues by 90 per cent and threatened his start-up’s future, Rome2Rio chief executive Yeswanth Munnangi says his Melbourne-based travel platform is now stronger than ever and is ready to take on the likes of Google.

Racking up close to 50 million users a month globally, Rome2Rio’s platform combines flights, trains, buses and boats allowing travellers to book door-to-door travel, offering proprietary features and algorithms that the tech giants can’t compete with, he said.

Mr Munnangi said he managed to get through Covid-19 without making any lay-offs, and thanks to bumper demand for international travel has doubled its team over the past year to nearly 70 staff, and is looking to get to 100 next year.

“When Covid hit our numbers started tanking really quickly … We went from our budget looking really good to our revenues being at minus 90 per cent compared to what we were expecting,” Mr Munnangi said in an interview.

“We had to regroup and think about how we were going to survive, and we went with some very simple principles to say ‘this is a business we believe in for the long term, and the team is at the core of the business, given all the knowledge and expertise and what they have built’. Our revenues are now back to two and a half times our 2019 numbers, and we’ve had no loss of staff.

“We managed to cut a lot of costs that weren’t salaries or people costs. We did get support from JobKeeper, but the core principle was that this is a long-term business so let’s keep the team together, and we did everything we could to do that.”

Rome2Rio’s journey started as a small start-up more than a decade ago, when it was founded by ex-Microsoft executives Bernhard Tschirren and Michael Cameron in a Melbourne co-working space.

Rome2Rio co-founders Michael Cameron (left) and Bernie Tschirren. Picture: Stuart McEvoy/The Australian

The company was then acquired by Berlin-based travel booking platform Omio for $40m, a deal that sparked some criticism from Rome2Rio’s former CEO Rod Cuthbert who thought the start-up should have been valued higher, and described the acquisition as a “fabulous deal for Omio”.

“As a shareholder I would have preferred to wait longer, not just for me but for staff, who I think were really enjoying the idea of chasing a big exit, and all the excitement and satisfaction that comes with that sort of outcome,” Mr Cuthbert said at the time, as reported by The Australian.

Mr Munnangi, a former Omio executive who was installed as Rome2Rio CEO in January 2020, said the acquisition had been vindicated by the fact the Rome2Rio brand had been kept intact, that its core engineers stayed on, and that its parent company helped it weather the Covid storm.

“Lots of companies fail in that journey of moving from start-up to scale-up, and we wanted to do that well. We wanted to do that with everything that made the company strong already, which is its core technology, but add a lot of commercial expertise which didn’t exist,” he said.

“If we didn’t have the Omio parent group to support and fund us during the pandemic period we would have struggled, so the support that gives us and the support from our long-term investors, maybe the path for the company would have been very different.”

The executive said demand for international travel is now ‘huge’, given many Australians are still working from home and are itchy to spend prolonged periods abroad.

He thinks Rome2Rio is currently underappreciated as an example of Melbourne-born technology being used the world over.

“I want to make sure that people here in Australia see our success, because this is not a small feat that we have built a product that has close to 50 million visitors a month. There are maybe only 100 products like that in the world, and many people don’t know that this is something that comes from here in Australia, and here in Melbourne.

“This is something we should take real pride in, businesses can be built here in Australia and have that kind of global impact.”