Bulgarian ‘Fly Now, Pay if Okay’ startup in talks with potential backers
A Bulgarian startup that allows customers to buy flight tickets and only pay when the plane touches down on time at its destination is in talks with potential backers in the Middle East, ahead of an official launch later this year.
Colibra was launched in 2019 and is described as a “Fly Now, Pay if Okay” service, where passengers can book a flight set to depart up to 30 days ahead, and the cost is only deducted from their credit card when they arrive at their destination, as opposed to paying at the point of booking when buying a ticket directly with an airline.
The app also does not charge customers at all if their flight is canceled, or delayed by more than three hours.
The app is currently in the beta testing phase and due to be officially launched in the Middle East in the fourth quarter of this year.
The app is currently accepting a small number of users in the region, in order to test the product, and Kalojan Georgiev, CEO and co-founder of Colibra, told Arab News that when the company did some initial media in the UAE in March it received around 15,000 applications for flights, worth around $20 million, within the first 24 hours.
The company will need a lot of working capital to fund the business model, so Georgiev said he is in talks with a number of potential partners in the region, including in Saudi Arabia.
“We have a few parties we are discussing with in the area; one is Saudi, one in Qatar and a few others, but mostly in the
UAE,” he said, adding that these included banks and financial institutions, private equity firms, high net worth individuals and family offices.
“I cannot name it now because we are under NDA (non-disclosure agreement), but there are some government institutions which are supporting us,” he said.
The company’s business model is based on the margin on compensation for delayed flights. If a flight is delayed, the app applies for compensation from the airline on the passenger’s behalf and its profit is the difference, usually around 20 percent, between what it receives from the airline and what it pays out to the user. It also plans to launch other travel-related services on the app, such as hotel and car rental bookings, which would be additional revenue
streams.