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SilverRail Technologies Inc. has come out of stealth mode, announcing its plans to be the ITA Software of rail travel.
With $9 million in venture capital commitments from three venture firms, SilverRail has built a ticketing system designed to integrate the high-speed rail systems criss-crossing Europe, and eventually the globe. Although high-speed rail service in Europe is fast-growing, it is balkanized. Travelers have to visit multiple sites to buy connecting tickets.
SilverRail plans to aggregate ticketing for all those services in one application programming interface (API), making it available to travelers via its own direct site, and through online travel-search sites. The company has contracts with travel sites Expedia and Orbitz, and enterprise travel agency Rearden Commerce, said founder and CEO Aaron Gowell.
“Rail is actually wiping out air in a lot of (European) markets, and the world,” Gowell said. Bundling hotel deals with flights is a cash cow for travel sites, he said – but so far there’s been no way for them to reach rail travelers with those offers. “If you don’t have the rail, you’re out of the hotel game.”
A founding employee at General Catalyst Partners, and formerly CEO of GC portfolio company National Leisure Group Inc., Gowell launched SilverRail last summer with $6 million from GrandBanks Capital of Wellesley, PAR Capital of Boston, and Sutter Hill Ventures of Palo Alto, Calif. The startup paid $500,000 to acquire the technology assets of Wandrian, a now-defunct leisure travel business that had been working on a rail ticketing system. An additional $3 million in venture capital closes the end of this month.
The company is now about 25 employees, with offices in Boston and London, and expects to reach profitability in the first quarter of 2011, Gowell said. It estimates its addressable market – the global market for long-distance rail travel – at $180 billion.
SilverRail head of product William Phillipson, a former ITA employee, came over with the purchase. SilverRail now has a direct-to-consumer site, quno.com, in private beta in the U.K. The next countries to come on line will be the BeNeLux region (Belgium, the Netherlands and Luxembourg), and then Germany, Philipson said.
It’s been a challenging process. For example, the U.K. has 20 privately owned rail companies. Tickets are handelled through a central clearing house, but that itself comprises five different systems – one for inventory, one for fares, one for payment, etc. – Gowell said.
To deal with that, Phillipson designed a Java-based system to use dynamic packaging concepts to interconnect and process information from multiple non-standard inventory and pricing systems. Each source database has unique business terms, processes and methods of connection, but, “Fundamentally, the structure and the meaning of the data is the same,” he said.
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