Travel Giant Webjet (WEB:ASX) to Invest $4.1M into LockTrip and HYDRA

We could not be more excited to announce that Webjet and LockTrip are entering into an unprecedented deal in the crypto space. Australia-based superbrand Webjet recognizes the value potential of the blockchain startup LockTrip and joins its mission by securing the rights for up to a 51% stake in what is a unique deal for blockchain space.

Summary of Article

Introduction to Webjet

Webjet (WEB:ASX), headquartered in Melbourne (Australia), is the world’s second-largest accommodation supplier to the travel industry through its WebBeds division. Across its multiple B2B wholesale brands, Webjet is supplying more than 44,000 clients with world-wide inventory and has a presence in more than 50 countries. This includes wide profile of companies such as travel agencies, online travel agencies as well as other wholesale suppliers.

The Inventory supply Brands owned by Webjet are:

In addition to the wholesale inventory supply, Webjet dominates the OTA market in Australia and New Zealand via the retail sites https://www.webjet.com.au/ and https://www.webjet.co.nz/. Listed on the Australian Stock Exchange, the company is currently traded at a valuation of above AU$2 Billion and has recorded a total flights/booking transaction volume of AU$3 Billion for 2020.

Extensive Auditing and Technical Due-Diligence

The crypto industry is still very young. The majority of the population associates the space with high-risk investments, questionable business models, and a great share of speculation. In many cases, rightly so.

This makes it unattractive for global real-world businesses to join the space, as such a move naturally comes with a high risk for their existing business — and more importantly, reputation.

The more telling it is that Webjet, a publicly-traded multi-billion AUD company, takes such a bold move to embrace the future. Above all, this demonstrates that true innovation and responsible management do make a difference, regardless of what others are doing.

To make the deal possible, we went through a two-year extensive process from some of the toughest auditing agencies, including a thorough legal, financial, and technical due-diligence.

More than just a VC Deal

Since the inception of LockTrip, we have repeatedly received investment-offers from various VCs. Some community members were wondering why we weren’t making any move in this direction. As is publicly known, we declined all of them. LockTrip has consistently been in a strong financial position and never had the need to raise more capital. Even today, three years after the public crowdfunding, we have more than enough funding for a substantial runaway without even touching our crypto reserves.

So, what changed?

For us the main question has always been about “What non-financial benefits can we expect from a potential investment?”. More importantly: “How can this partner accelerate our mission of decentralizing the travel industry?”.

Questions about the end-game and not so much about a short-term financial boost.

Although the $4.1M in cash coupled with the second optional tranche of $4.2M (for a total potential of $8.3M) additional cash injection is certainly a massive factor that further improves the financial stability of the company, we view this deal more as a marriage than an investment. The synergies and new opportunities go far beyond a simple value exchange.

Webjet was cherry-picked as the only company we wanted to make a deal with and we worked very hard to make it happen.

Prominents Joining LockTrip’s Board of Directors

As part of the deal, we will be welcoming John Guscic (Managing Director of Webjet Ltd.) and Lynne Oldfield (Director Corporate Development of Webjet Ltd.) to LockTrip’s board of directors.

This top-level involvement is not only a sign of the mutual trust we developed over the past two years, but also reinforces the commitment Webjet brings to the deal. Their extensive experience and management qualities will be of great value to the future and growth of LockTrip.

Regarding their investment decision, John Guscic says:

“We first made contact with the LockTrip’s founders in early 2019 to share views on blockchain, given Webjet’s blockchain journey with Rezchain. From the initial conversation, we were impressed with the way the founders approached solving the well-known challenges of a public blockchain, and felt they had a game changing opportunity to utilize the fundamental features of blockchain to improve the hotel distribution landscape”

He then continues:

“Having identified the exciting potential that Locktrip and Hydra could offer, we began to explore a deeper relationship, which has resulted in today’s announcement. We are delighted to be on board with the LockTrip founders offering innovation to travel consumers and suppliers alike”.

Lynne Oldfield comments:

“Public blockchains are typically slow, resource hungry and have unpredictable pricing; with the release of Hydra chain, the founders of LockTrip provide a robust, scalable platform for genuine commercial applications and we are excited to invest with them as they grow this opportunity”

Overview of the Agreement Structure

The agreement is split into two phases. The first phase consists of a $4.1M investment, for a 25% share of LockTrip.

→ Phase one is currently being executed on and will be finalized in the coming weeks

Phase two consists of an additional US$4.2M investment, for a 26% share of LockTrip (total of 51%). Phase two is optional, and is subject to a number of conditions. As previously noted, Webjet has committed to integrate the LockTrip’s marketplace with the existing LOC economy onto Webjet’s retail OTAs.

Nikola Alexandrov — CEO of LockTrip comments:

“The LockTrip/Webjet deal is a testament on how traditional tech giants spot opportunity in blockchain technology. Among the multiple synergies, perhaps the most unique feature of the deal is Webjet’s commitment to integrate the LockTrip’s marketplace on it’s OTA websites. If that condition is met, the LOC economy would be supercharged by the existing business of a global superbrand that has millions of active users. This makes the deal unprecedented in the blockchain space.”

→ it is expected that the integration will be completed within a 2 year timeframe

Key Protective Mechanisms

What does this mean for the LOC economy, project management and long term outlook? We are aware that some community members may get worried about the project trajectory and potential implications on LOC.

Nikola Alexandrov comments:

“John and Lynne have really demonstrated remarkable ethics and culture for nurturing partnerships to grow businesses into the next level. This can also be seen by the stellar performance of the stock price of Webjet over the course of the last 10 years. Under the leadership of John, Webjet has demonstrated impressive traction in a series of successful expansions. We were particularly impressed by the level of attention they put towards protecting the LOC economy and also making sure we as founders remain at the center of the project.”

At this point, we want to emphasize that no changes will be made to the trajectory or economy and/or to the way the business is being handled. The agreement contains a long list of safety mechanisms, of which some will be elaborated below:

Non-Financial Benefits

Supercharging LockTrip’s cash position by $8.3M is certainly a strong benefit. But aside from that, there is also a wide range of benefits that can not be purchased, such as:

LockTrip Marketplace Integration on Webjet’s Retail Travel Websites

As mentioned previously, Webjet has confirmed it will integrate the LockTrip marketplace and economy on the Webjet OTA websites. This is an important recognition of the innovation the LockTrip model represents. Webjet is the leading OTA in Australia and New Zealand.

Webjet is the leading OTA in Australia and New Zealand.

https://www.webjet.com.au (for Australia)

https://www.webjet.co.nz (for New Zealand)

The integration will be both in terms of our marketplace technology, as well as the LOC economy behind it. This means that if successful, bookings going through any of the two websites above would also lead to a LOC burn equalling 3% of the booking amount.

This of course will be in addition to our own marketplace at LockTrip.com, which will continue its operations and expand towards a global target audience.

Upon successful integration, there will be 3 unique marketplaces connected to the LOC economy.

Needless to say, this will be a massive step for the advancement of LockTrip, which also brings a number of technical challenges. We will need to go through tremendous scaling, with every improvement and learning made during the process also benefiting the LockTrips.com version of the marketplace.

As with everything in life, there is no guarantee that the integration will be successful or that it will take place, but both Webjet and LockTrip will be working with the highest level of commitment to make it happen.

Rezchain, Hydra and Opportunities

Webjet has been investing in their own commercially viable blockchain based project branded Rezchain, which aims to prevent data mismatches between various suppliers and intermediaries. Rezchain is a private blockchain, with 100% centralized nodes and is fully operational as we speak. To a certain degree, Rezchain is also trying to tackle some of the problems that LockTrip also identifies in the travel industry.

For those of you who have been with LockTrip from the beginning, the problems regarding data mismatch, fragmented supplier relationships and inefficient distribution are not new. These are exactly the core problems we set out to solve by launching LockTrip.

The development of Hydra chain also had the core purpose of serving this long-term goal, as it offers all the tools needed to build a distributed travel database. Some of these are:

1. Fixed Transaction Fees in USD

→ Transaction fees on Hydra chain are voted for in USD equivalent. A price oracle then fetches the HYDRA/USD rate in real-time and adjusts the fee policy dynamically towards the voted level.

→ This allows real-world businesses to execute their transactions without having to worry about volatile fees, which is a very important requirement for a distributed travel application for global use.

2. Powerful Staking Economy

→ Hydra is a Proof of Stake (POS) blockchain and as such comes with a fundamentally enhanced security against 51% attacks while at the same time being very resource-efficient. This allows for the global setup of hundreds of nodes at little cost, and thus ensures that the network is always maintained and is fully permissionless.

→ Businesses don’t have to worry about the blockchain being taken over by attackers (which is regularly happening to POW chains), that can put their operations at risk. At the same time, the easy and cheap setup of nodes creates a truly decentralized node infrastructure.

3. Wallet Level Scalability

→ Hydra allows for the parallel processing of transactions form a single wallet. This way it is possible for businesses to consolidate their operational activities on a small number of wallets, thus simplifying processes significantly.

Exploring the Deployment of Rezchain onto HYDRA

Webjet and LockTrip agreed to explore the possibility of deploying Rezchain onto Hydra chain, and thus migrating this important infrastructure from a centralized blockchain onto the decentralized infrastructure of Hydra.

There are a number of conditions that first need to be verified from both Webjet and Hydra.

However, if successful, bookings from hundreds of marketplaces could be routed through Hydra chain and thus add a strong pillar to the growing transactional economy. More importantly, this will help us work out any challenges that need to be solved to make a globally adopted solution a reality.

The Endgame: Tokenizing Hotel Inventory

The biggest long-term potential for the deal with Webjet lies in the endgame scenario we have been envisioning from the very first day of the project.

Tokenizing travel inventory, and thus connecting various suppliers, hotels and marketplaces through a globally accessible distributed travel database.

Onboarding Rezchain to Hydra is a massive leap towards this direction. If the integration works as expected and clients are happy with the result, then this could become a stepping stone for more advanced versions of the system.

We can not imagine a better partner to embrace and work on the future of travel than Webjet.

About LockTrip

LockTrip is a blockchain-based travel marketplace that allows users to save up to 60% on their bookings by cutting out middlemen. Every booking burns LOC proportionally to its booking value, continuously reducing its total supply.

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