Hipmunk Plans to Take Off Internationally With $15 Million in New Capital

Hipmunk, the offbeat travel site that has made “taking the agony out of travel planning” its tagline, tells AllThingsD that it has raised $15 million in a second round of funding.

The financing will enable the team to double — to 32 employees — in the next six months, and to accelerate its product plans going forward.

Hipmunk is different from other travel services because it displays search results visually. Instead of seeing a list of flights, the user can easily scan flights by price, duration, and departure and arrival time in a grid layout. Users also can sort by “agony,” which is a combination of price, number of stops and duration.

Since launching in 2010, the company has created a mobile application that has been downloaded more than one million times; the app recently added hotel search. In the future, Hipmunk plans to continue improving flight and hotel search on both the Web and mobile, while also expanding internationally.

“We want to be the de facto travel tool,” said Hipmunk CEO and co-founder Adam Goldstein. “We have a great user interface that helps people find the best options, but we knew our ability to ramp would be easier with additional funding. The fact is that now, instead of building one thing at a time, we can build multiple things at once.”

The company’s second round was led by Institutional Venture Partners (IVP) with investors from the company’s first round, including angels and Ignition Partners, also participating. In total, Hipmunk has raised $20 million.

IVP’s General Partner Todd Chaffee, who previously invested in Kayak and HomeAway, will join Hipmunk’s board.

Goldstein said that Hipmunk is not just about creating a better user interface, it’s about creating new experiences.

“Hipmunk is a different place to shop, with alternate sources of inventory,” he said.

For example, when searching flights, it features private jets alongside traditonal flights; when searching for hotels, it displays apartments for rent on HomeAway and Airbnb.

As with other travel sites, like Kayak, Hipmunk earns a commission from traffic it sends to aggregators such as Orbitz or Expedia. He declined to disclose the agreement it has with HomeAway, Airbnb and less-traditional sites.

Chaffee said that even though Goldstein is only 24 years old, he feels like he’s talking to a veteran CEO.

“He’s incredibly well versed on how to run a business that’s way beyond his years,” he said of Goldstein.

Hipmunk is just one of a few companies that are trying to upset the status quo by trying to make booking travel less painful. Google recently purchased ITA Software to integrate flight information into its search results, and other start-ups, like HotelTonight, allow you to find a hotel room on your mobile phone for the same day.

“People woke up and finally realized that the travel companies haven’t meaningfully innovated in a decade,” Goldstein said. “The travel start-ups don’t have entrenched financial interest in the status quo, but the big ones are global distribution systems who are unwilling to experiment with new experiences, that don’t want to risk losing customers who have been using them for 10 years.”

Chaffee said the opportunity to build another massive company like Expedia, Priceline, Orbitz or Kayak still exists. The game isn’t over yet.

“The real story here is, if you look at the overall share of purchases going through Kayak and Hipmunk, it’s unbelievably small,” he said. “The bulk of the average U.S. citizens don’t know about these services, and they are still trying to call the airline, or fumble through some airline Web site, or surf hotel Web sites. They are terrible, and you don’t have to suffer.”

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— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik