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Take and change
– Justin Dawes
The start-up Hygo has generated millions of dollars in revenue for tour guides during their off-season.
The London-based virtual experiences platform was founded in 2020 to help people “travel” when the world was shut down during the pandemic. Customers can attend virtual tours led by local guides.
And Heigo raised $20 million in venture capital in February 2022 with big plans for long-term growth after the pandemic.
After nearly three years of operation, Hego closed permanently this week.
“The parameters have changed post-Covid. said John Tertan, who graduated from Oxford University in 2015 and worked at a law firm for four years before founding Heigo.
“It’s a very difficult decision to return the capital, but in the circumstances, I felt very responsible with the money.”
Between when Heigo raised the money and the following November, the number of bookings doubled to 4 million. There was hope that growth would continue, but customer activity has peaked as people choose to travel physically after the pandemic — and a startup that has raised money will need to grow to keep investors happy.
Beyond its basic use as a platform, Heigo has created a community by connecting travelers who sometimes meet in real life. “Telling the community it was coming to an end was the saddest part,” Tertan said. He broke the news to about 1,200 people in a virtual town hall.
“It was very emotional,” Tertan said. “We got into a really passionate group, so that’s a bit of a shame.”
Some guides have formed their own groups, and Hego’s group spends the rest of their time helping the community make connections.
While Heigo had some contracts with businesses, the platform was more structured for consumers, and that was the model it kept. A business-to-business approach, however, may be the key to life for virtual experience companies born out of other epidemics that are still going strong.
For example, Wowzitude partners with high-end organizations to provide a taste for people who can’t travel, as well as with tour operators and travel providers, to give prospective clients a taste, said founder Susan Black.
Wowzitude also works with existing platforms like Zoom. And the company is fee-based rather than tip-based, which she believes will be more sustainable for the guides.
“Although we’ve won several pitch competitions to help with our awareness, we’ve chosen not to take an investment, at least at this time,” Black said. “We don’t need it; We are profitable, and our focus is only on scale. Also on the product itself.
Ultimately, Tertan said, he and his investors agreed that closing Haigo was the best course of action. The Series A was led by Northzone, with support from Lightspeed Venture Partners, Point 9 Capital, TQ Ventures, Ascension, Fund, and several angel investors.
“They were very positive. Our relationships are really good, which is fantastic,” Tertan said. “It made me feel comfortable that the next thing I could pick up the phone and open her phone.”
Along the way, he believes he learned some valuable lessons on how to build a company, such as understanding customer pain points, as well as how to manage a team of about 20 employees. And another lesson: maybe don’t raise a lot of money for such a good product too soon because more money means reaching bigger goals.
“It’s hard to know as a first-time founder,” he said.
As many early venture capitalists have said over the years, they almost always invest more in the founder than the founder’s idea. And the founders of some early companies are less likely to make the same mistakes again, and this usually makes them a better investment.
Tartan may be raising money for another idea in the future, though it’s unclear exactly where the road will lead. First, it takes some time to travel and visit with family and friends.
“I still have the itch,” he said. “I think it would be a shame not to use what I learned to try something else or build other things.”
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