216 CAPITAL participates in a $1.5M funding round for the startup Arcube
216 CAPITAL participates in a $1.5M funding round for the startup Arcube
The airline sector is grappling with challenges in loyalty program management to enhance customer relationships. With price comparison sites driving ticket prices down by 54% since 2013, airlines are increasingly reliant on ancillary revenue, allocating up to 56% to customer loyalty programs. Arcube is revolutionizing this approach by optimizing the distribution of ancillary services, boosting revenue and strengthening customer engagement.
As the world's first post-flight solution, Arcube leverages AI to enable airlines to optimize ancillary sales with personalized offers. By analyzing hundreds of data points, Arcube delivers tailored experiences – such as offering priority security access, redeemable with loyalty points, to passengers connecting through congested airports. This turns potential negative experiences into loyalty-building opportunities, fostering engagement and increasing customer retention.
To accelerate its growth, Arcube announces a $1.5M funding round co-led by 216 CAPITAL, Fuel Ventures, and Oxford Capital Partners, with participation from the CEO of Pegasus Airlines.
Founded by University of Manchester graduates Prithveesh Reddy and Harvey Lowe, Arcube is a B2B travel-tech platform born from the ambition to redefine loyalty in the airline sector. In 2022, combining raised funds, grants, and awards, the two co-founders, then just 18 years old, designed Arcube to address a key observation: traditional loyalty programs benefit only 5% of frequent flyers, leaving the majority of travelers without significant advantages. Their solution offers an inclusive approach, enabling all customers to benefit from post-flight services (seat selection, pet transport, onboard Wi-Fi, etc.)
In their first year of university, Reddy and Lowe caught the attention of Etihad Airways' London office. Following a swift negotiation, they secured the 10,000-employee airline giant as their first client. Within two years, Arcube enabled 1,300 Etihad passengers to personalize their travel experience, generating $1.6 million in incremental revenue, boosting average customer spend by 10.3%, and significantly enhancing customer satisfaction.
Co-founder Harvey Lowe said: “It was all about reaching the right person at the right time. We have unwavering confidence in our offering, but breaking into the airline industry is notoriously difficult. Etihad's positive response was a game-changer for us, validating that we were on the right track.”
Dhekra Khelifi, Partner at 216 Capital Ventures stated: "We firmly believe in Arcube's value proposition and their ability to execute their ambitious vision while scaling beyond the airline industry. We are confident that they will leverage the Tunisian talent pool as a significant asset to overcome challenges, enhance their product, and implement cutting-edge technology. Furthermore, Africa represents a rapidly growing tourism market where airlines, the hospitality sector, and other operators are seeking to enrich their offerings and remain competitive. Tunisia continues to strengthen its position as a strategic entry point into this expanding market."
With 14 airlines already in discussions, Arcube aims to extend its offerings across the entire travel ecosystem, including car rentals, cruise lines, and hotels. Backed by proven results and strategic partnerships, the startup is already establishing itself as a key player in reinventing loyalty within the travel industry.