By Riley Kaminer
When he was a consultant at McKinsey, Alex Jara spent a lot of time in the air. Flying internationally on an almost weekly basis gave Jara an unusually in-depth perspective into how airlines work. Or more importantly, how they don’t.
“There was a moment when the company paid for my fully-refundable ticket to New Zealand, and it cost $17,000,” he told Refresh Miami. “A couple of days passed by and I saw that the price dropped, so I called my travel agency and asked them to refund it and rebuy it.”
“But it took ages to actually get the refund. That made me think: ‘What’s going on? Why is this so cumbersome?’”
That’s when the inner management consultant in him jumped out. After doing some sleuthing, Jara realized that there was a complex web of rules, regulations, and systems governing refunds. Ultimately, this creates a bad customer experience, as he had seen firsthand. But equally, these processes are significantly costly for ticket providers.
In 2018, after having graduated from Berkeley’s MBA program, Jara co-founded startup Deal Engine to tackle this very problem: using artificial intelligence to automate airline ticket refunds and changes.
Today, Deal Engine announced that it has raised a $5.3 million seed round led by F-Prime Capital with participation from Thayer Ventures, PAR Capital Management, Plug and Play, as well as several angel investors.
Jara said that these funds will enable Deal Engine to rev up their expansion plans, with plans to enter new international markets: from North America to Europe to the Middle East. With this funding, Deal Engine’s 30-person team will double next year, particularly focusing on their engineering and go-to-market teams.
“Right now, after you sell a ticket, managing, changing, and refunding it is a painful manual process,” explained Jara, who is Deal Engine’s CEO. “You currently need armies of people to do that.”
Deal Engine is able to automate these processes using natural language processing. The startup’s customers – which include two of the biggest online travel agents and one of the top 10 airlines globally – can either plug into Deal Engine’s system via their API or use a proprietary interface.
According to Jara, Deal Engine can cut down a typical refunding process from 30 to 40 minutes to a matter of seconds. “They can do 100 times more in a tenth of a time,” he said.
Looking forward, Jara has plans to inject AI-powered efficiency across all processes for airlines and travel agents – far beyond just post-booking transactions. For instance, he is keenly interested in deploying AI to help customers sell different products like car rentals and hotel rooms at different times rather than just at checkout. “We’re just scratching the surface,” he said.
While remote-first Deal Engine was originally founded in the Bay Area, Jara moved to Miami this year. “Miami is one of my favorite cities,” he said, noting a few major advantages of moving here. For one, the major presence of travel industry giants. Two, the time zone, which makes working with European clients easier. Three, his family connections. And four, of course, “Miami’s growing tech ecosystem played an important role as well.”
READ MORE IN REFRESH MIAMI:
- NFTs take flight with Miami-based TravelX
- Are your payment terms optimized? Probably not – and it’s costing you. Calculum can help.
- On-demand rental car service Kyte surfs into Miami
- Miami startup Runway making it easier, cheaper to get medicines before you travel
- Fueled by $15M fundraise, Ping takes the sting out of getting paid in USD or crypto
- Meet the Miami company transforming food waste into carbon credits
