Hiyo, a Hangzhou-based outward bound and travel platform, has raised RMB 14 million in an angel round of financing in August backed by Qianpu Capital and other investors, according to 36 Kr. The company has also built strategic ties with Tongcheng Tourism in attractions, ticketing and other sectors.
The fund will partly be used for team building, as the project is talent-driven in the initial stage and it costs upwards of a million yuan a month in recruiting campus agencies and city managers. The fund will also be used for expanding the campus market and attracting student users.
Hiyo specializes in the outward bound and travel space. It provides high-quality DIY development plans to meet the demands of student travelers. A research of the team found that young people tend to travel much more than adults, and they value social elements such as who they will mix with and how they will interact, rather than attractions and activities. As such, the products of Hiyo are developed around the concept of “minimal transportation, short distance”, and the content is mainly about socializing, relaxation and entertainment.
The startup has launched pilot stores in Shanghai, Hangzhou, Guangzhou, Chengdu, Ningbo, Hefei, Wuhan and other cities so far, and it hopes to build a national network in the future.
Profits of low-cost travel products are limited. With a gross margin of about 30%, Hiyo can barely break even, not taking into account the initial promotion costs. Although the average charge of 100 yuan per person won’t help the company make money yet, Hiyo can build up its scale, which could become the company’s real value. “While national 2A-level or 3A-level attractions could only receive 200,000 visitors per year, our extensive range of products nationwide can serve around 5 million students. Attraction upgrades can be achieved with capital investment and infrastructure improvement, but it takes more than these to expand visitor volume. This is where Hiyo comes in.” The company is in talk with an attraction in Jiangsu in this regard.
Yi Fang, CEO of Hiyo, said that Hiyo aims at driving the quantity and capacity of student users through outward bound products and campus channels in the short term, and then connect to integrated services like attraction planning and brand upgrades.