Capital One Takes Leap Of Faith Into Travel With Acquisition Of Freebird

With 2020 being a difficult year for many industries hit by the pandemic, there is little doubt that the travel industry, especially flight services, has been hit harder than most.

Despite this, banking heavyweight Capital One has placed its bets on the future of travel by purchasing Freebird, a startup alternative to flight insurance that had ceased operating due to Covid-19. The news was shared by Freebird founder and CEO Ethan Bernstein on LinkedIn last Wednesday.

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A business-to-business startup, Freebird dealt specifically with cancellations by solving a pain point in real time. Using predictive technology, the app offered agents the ability to sell smarter flight insurance and rebooking services. Aimed at domestic trips, travelers were able to enroll with Freebird up to two days before their flight by paying either $19 for one way, or $34 for the whole route. If a flight were cancelled or delayed for over four hours, the traveler would receive a text alerting them to the disruption followed by a link with alternative flight options. They are then able to select their preferred next best flight regardless of airline or ticket price, and Freebird purchases the ticket for them.

Founded in Cambridge, Massachusetts by Ethan Bernstein and Sam Zimmerman in 2015, Freebird quickly grew without much marketing investment due to word-of-mouth and repeat business. The startup shared that they had previously received more than $16 million by investors that included General Catalyst and Accomplice. American Express’ venture capital arm was reported to be another investor, offering the service as a free perk for their Platinum card holders.

Jeff Fagnan, founding partner of Accomplice shared that he initially invested in Freebird as he was “quickly impressed with Bernstein’s knowledge and passion,” stating “we looked around and saw some other examples of different types of travel insurance. But it was taken on an old broken business model and redoing it in a digital format.”

Prior to creating Freebird, Bernstein was an executive for Expedia. It has been revealed that Bernstein is beginning a position as senior business director for travel at Capital One, and that most of Freebirds’ staff will be joining the top 3 card issuer. For now, it is yet to be determined d whether Capital One will incorporate Freebird into its current offerings, or if this is a staff and technology acquisition.