Seattle-based travel startup Otto expects to more than double its staff after announcing a $6 million seed round.
The company emerged from stealth Thursday along with the funding announcement. Otto makes an artificial intelligence assistant that helps business travelers find and book hotels and flights.
Seven people currently work for the company including contractors, founder and CEO Michael Gulmann said. He added that the team should grow to about 15 to 20 employees over the next year with the funding, which gives Otto roughly 18 to 24 months of runway.
"We're actively hiring full-stack engineers," Gulmann said. "We want to be aggressive but also conservative with the use of the money. It's very much building out the product."
Otto users will be able go through a website or app to book their travel, or they can message Otto through Slack, Microsoft Teams or text.
The tool will function like a mobile concierge or travel agent. For example, a business traveler can use Otto to look for a hotel with a rooftop bar within a five-minute walk of a convention center, or if the traveler prefers a certain airline, the traveler can type that into Otto, and the tool will find options.
Gulmann said the goal is to have a working prototype by the end of September, with a beta version by the end of the year and general availability by the first quarter of next year.
Otto has gotten "well over a couple of hundred" signups in less than 24 hours, Gulmann said. The startup will make money on commission fees for flights and hotels booked, as the product is free for users.
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Four of the company's workers are based in Seattle, Gulmann said. Otto works out of Madrona Venture Labs in the 999 Third tower in downtown Seattle for now. Gulmann, a longtime Expedia veteran, added that Otto could need its own office space once it hits roughly 10 employees, but that's at least six months down the road.
Seattle-based Madrona Venture Group led the seed round, while Direct Travel and angel investors participated. Madrona has invested in big names like Amazon and Redfin. Steve Singh, a managing director at Madrona, will serve as Otto's executive chairman. Singh is also the co-founder and former CEO of the expense management company Concur, which sold to SAP for $8.3 billion in 2014.
Gulmann, when asked why a large travel company like Expedia wouldn't make a similar product and squeeze Otto out of the market, said that while Expedia has the ability to create a service like Otto, it comes down to agility. He called Expedia a "fantastic company" but said large companies have so much infrastructure built around their core product that it's hard to pivot to something different and niche.
"The larger companies are just slower to move on it," Gulmann said. "It's harder to risk that large book of business they already have."
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