At the end of last year, Boston-based corporate travel startup Lola.com had it all: tens of millions in funding from top venture capital firms, a couple of high-profile executives in the corner offices and a shiny new space at One Financial Center that opened just before the holidays in the presence of Mayor Marty Walsh.
In the space of few weeks, everything changed. The coronavirus pandemic disrupted the travel industry worldwide, and froze the company’s core product, "Lola Travel" – a software that helps companies manage business travel. As a result, CEO Mike Volpe laid off 34 people, or nearly one-third of the company's workforce. Paul English, chief technology officer and co-founder, admitted over the summer that he wishes he didn't sign a two-year sublease deal for the office space, which the company spent over $1 million to renovate.
Now, after months of relative silence, Lola.com is launching a new product that Volpe and English see as an expansion of the travel management software. "Lola Spend" — a combination of software, credit cards and an app that's been tested in a private beta — becomes publicly available on Wednesday.
Based on the same security, e-commerce and user interface capabilities as "Lola Travel," the new product seeks to help department managers and heads of finance manage their corporate budgets, while tracking all business expenses in real time. In the words of Volpe, it will eliminate the need for expense reports.
"Although it is a pivot, it's not a radical pivot," English said in an interview with Volpe. "We're doing something that we're selling to the same customer."
The new product is hoped to resurrect the company's decimated revenues. Lola.com's business started to slide in the early days of March. Until then, the company had been selling its travel software mostly to chief financial officers of companies with 50 to 500 employees. As days passed, the number of customers kept decreasing.
Final numbers saw April revenue down 97% versus February, according to Volpe, who tried to take it in stride. "Paul's started five companies; I've worked in startups for almost 20 years. If there's one thing we know, is that change is constant," he said.
Under the new software system, all employees get a corporate credit to pay for their expenses, but managers are still in control of how much and how their direct reports can spend their allocation. When employees swipe their cards, an alert pops up on the Lola app on their phones, with budget to which the expense is tied. Employees take a picture of the receipt if it's over $75, and don't file a expense report. Lola makes a small amount of money on each of the purchases.
The fact that the approval and tracking of expenses happen in real time solves some issues tied with expense reports, according to Volpe. Often, department heads have a hard time reconciling expenses made by employees (and reported days or weeks after the purchase) with the budget the department has for the quarter.
"I know the difficulty and the pain that they go through around managing budgets," Volpe said. "I've had those meetings where I walk in with the finance team, and I'm all happy because I think I'm 20% under budget. And they're kind of upset at me because they think I'm 10% over budget."
With 67 employees and cash in the bank to last until 2022, Lola.com didn't share specific milestones for the success of the product, but it secured the approval of investors about the move, according to Volpe and English.
"We're very excited and super supportive," said Gail Goodman, chair of the board, over the phone.
