Fetcherr Lands $90M to Get Airlines on Board with Dynamic Pricing

The airline industry is projected to reach record revenue this year, with total expenses expected to reach $936 billion and earnings coming out to around $6.14 per passenger. To bolster profits, more airlines are turning to dynamic pricing technology, which prices fares and amenities variably based on a traveler's willingness to pay.

Despite controversy surrounding dynamic pricing, 258 carriers have deployed some form of the technology, up from 220 in 2022. One of the vendors providing infrastructure for dynamic pricing systems is Fetcherr, which launched in 2019. The app uses AI to forecast demand for particular airline routes and generate dynamic prices, which are shown to customers as they search a carrier's website.

"The airline industry faces significant challenges in adopting continuous pricing," said Roy Cohen, Fetcherr's CEO. "Traditional, outdated infrastructure and rule-based systems limit real-time adjustments and swift market adaptation … Fetcherr employs AI to generate optimal market moves, dynamically optimizing pricing and automating real-time publishing of prices."

Fetcherr's models are trained on several years of bookings, flight schedules, availability, and fares data, as well as variables like weather and microeconomic/macroeconomic market conditions. The company has already made significant strides in helping its customers boost their topline, with clients including WestJet, Viva Aerobus, Virgin Atlantic, Royal Air Maroc, and Azul Airlines.

This month, Fetcherr closed a $90 million Series B funding round led by Battery Ventures, bringing its total raised to $114.5 million. The company plans to use the proceeds to develop a new AI-powered "offer engine" to bundle and price multiple carrier services together, as well as grow its headcount to around 150 by year-end.

While dynamic pricing has its benefits, it also has its drawbacks. For example, it can lead to what some call "implicit collusion" between firms, which raises prices overall. Additionally, dynamic pricing systems that factor in competitor behavior could result in airlines selling too many tickets too quickly. In some countries, dynamic pricing might eventually be outlawed or curtailed under tariff requirements.

Despite these challenges, Fetcherr is poised for growth, with plans to expand beyond the airline industry into other markets. The company's focus on being cash-positive and lean has allowed it to grow each year, and its new funding round will help it continue to innovate and expand its offerings.

AndroGuider Team

Articles written by the AndroGuider team. We try to make them thorough and informational while being easy to read.