“The market for online train tickets is not particularly crowded,” stated the BBC when it reported on the upcoming IPO of British tech company Trainline. Maybe that’s a key point; the company has got technology, and a relatively open and massive market. It’s not exactly like there is an empty goal net that Trainline’s board can tap the metaphorical ball into, but it does seem to have something of a head start. It also bought out French company and competitor Captain Train a couple of years ago, that helps.
But Trainline has got two other things going for it.
First of all, it’s profitable. According to Lawrence Gosling, Editor of What Investment, that makes it “a rarity.” Gosling contrasted Trainline with that other well known tech transport app — Uber. “Uber’s losses grow as revenue increases” said Gosling, “some doubt whether it will ever be profitable.”
By contrast, Trainline made an underlying profit of £10.5 million in the year to February, from ticket sales of £3.2 billion.
Secondly, it solves a problem. We spoke to Alex Harle, Executive Director of Professional Services firm Grovelands. “A lot of start-ups,” suggested Harle, “begin with a product. “If everything is product centric, then there is a limited life-span, you are either going to get caught-up, or get overtaken.”
The techs that typically do have business models with longevity start by looking at a “problem or pain points” that they can solve, he suggested.
“Trainline have created tech that consumers consume and they monetise it very well, now they have realised how to monetise it in other areas of the world.
“This is a positive story in a fanciful tech platform world. If more people took the route that Trainline has taken, you wouldn’t have investment and pension capital collapsing so regularly. Trainline is a breath of fresh air.”
Flying cars is about convergence
Trainline is raising £75 million from the IPO which is expected to take its valuation well into unicorn territory — a market cap of £1.5 billion has been touted.
The money will be used to take the technology into other territories, a big world could be opened up, although Trainline’s service is already available in 45 countries. However, it says that only 39% of train tickets were bought online in Europe’s five biggest markets last year, leaving room for expansion on its doorstep, let alone the rest of the world.
But maybe Trainline can tap into other markets and not just trains, but bus or plane travel.
And at a time when a taxi company Uber (for taxi company is what it really is) loses money faster than you can book a car from its service, maybe Trainline could move into taxi bookings.
As the brave new world of autonomous cars, car sharing, hyperloop, and flying cars approaches, maybe Trainline has opportunities beyond its original purpose — the problems and pain points it can solve will grow.
Future of transport: Space X predictions
RS Components have compiled a list of ways that transport is set to change in the future
On the other hand, as with all technology, there is a gripe. Has technology introduced a new class of traveller, creating a kind of third class? There is first class, as always, but there is now a class for those who have seat reservations. The rest, third class, are left to wander up and down train aisles, noticing a plethora of booked seats, eventually taking potluck, sitting in a reserved seat, hoping the person who booked it doesn’t turn up to claim it.
