The Vacation Predictor

While many bank on AI paying off in the future, one of the world’s hottest apps, Hopper, has raised $84 million by monetizing it right now.

- Kathleen Chaykowski

One of the most cutting-edge travel apps in the world makes its home in a decidedly old-fashioned setting: an active zinc factory in Montreal’s former garment district. Walking through a maze of sputtering machines and chemical vats, Fred Lalonde, founder and CEO of Hopper, the world’s fastest growing flight-booking app, explains why he has rented the space since 2009. “As bad as this place looks, it was probably the smartest place to start a data center,” he says. The building is powered by a hydrodam, part of a Canadian system that delivers a supply of cheap electricity and a perfect match for an energy-hungry startup making a big- data bet: that AI-driven recommendations can make travel more affordable and personalized than what people can craft for themselves.

Unlike most other travel sites, which generally want you to book right away, Hopper is predicated on patience. “Think of an e-commerce site that tells you 70% of the time, ‘Don’t buy,’ ” says Sophie Forest, a partner at Brightspark Ventures, the startup’s first investor. “Hopper is that anomaly.” Aimed primarily at the leisure-travel market, the app uses a sophisticated algorithm to predict the best deals and times to fly and buy—alerting users at the optimal moment, well before prices go up or down by specific amounts.

Since its launch in 2015, Hopper has become the most formidable newcomer in an $800 billion flight market dominated by Expedia, Lalonde’s former employer, and Booking Holdings (previously called Priceline), and now boasts more than 20 million users.

In January, Hopper was the fourth-most-downloaded travel app in the U.S., after Uber, Lyftand Airbnb. The 120-person company, led by Lalonde, 44, and co-founder and CTO Joost Ouwerkerk, 46, generated about $15 million in revenue last year by selling flights, almost entirely through push notifications.