UTU raises $35 million to help travelers get more out of duty-free shopping

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By Webdesk


Utu, a travel technology company that helps flyers get more out of their duty-free purchases, announced today that it has raised a $35 million Series B fund led by SC Ventures. Part of the funding was used to acquire CardsPal, a Singapore-based fintech that offers deals and promotions close to users.

During the travel disruption caused by the pandemic, utu worked to build partnerships with travel, hotel chain and retail brands. The company notes that while travel has recovered, only about 1% of venture capital funding over the past 15 years has gone to travel, mostly short-term rentals. Utu’s goal is to create innovation in the duty-free shopping sector, enabling tourists to reclaim VAT on their purchases.

Utu offers customers a Tax Free Card, which has two main offers. First, tax-free customers can opt for frequent flyer miles or hotel points instead of VAT refunds. Or they can select a direct shopping voucher that is equal to 120% of the VAT or GST they paid while shopping abroad. Utu says that retailers, airlines, hotels and other organizations that work with them can not only increase customer loyalty, but also grow their tourist shopping revenues by up to 40%.

Utu’s partners include 10 global airlines, such as Air France-KLM, Emirates, Qatar Airways and Singapore Airlines, as well as Accor, one of Europe’s largest hospitality brands. To facilitate payments, utu collaborates with fintech partners with Nium and also uses proprietary technology. It plans to announce more partnerships later this year.

The customer pays the VAT in advance and can reclaim it through operators such as Planet or Global Blue. But they don’t get the full amount of VAT back, and that’s where utu comes in.

Utu co-founder Asad Jumabhoy worked in duty free trading for eight years and then another 25 years in duty free shopping. While operating fashion and perfume stores at Singapore’s Changi Airport in the late 1980s and early 1990s, Jumabhoy started a tax refund business that grew into Global Blue. After selling Global Blue in 2012, Jumabhoy decided to use his knowledge of retail margins, VAT and customer shopping habits to develop utu.

“The way we think about our work is that we build new product layers on top of the existing tax-free shopping infrastructure that unlocks value for all stakeholders involved in tourism shopping – brands, tourists and our VAT refund partners,” he said.

Jumabhoy said that while duty-free shopping is a common practice, there are still two issues. The first is that the process of getting VAT refunds is difficult, and second, tourists only get part of their VAT expenses back. Utu focuses on the second problem and wants to give tourists more value when shopping. For example, they can receive more than 90% of their redemption value in airline frequent flyer miles.

The acquisition of CardsPal gives utu a digital marketplace, promotion engine and self-service merchant registration portal. It will also accelerate utu’s rollout in markets like France and Italy, plus another 50 countries that offer VAT and GST refunds.

Utu’s funding will be used to grow its product distribution in all countries that offer VAT refunds, invest in technology and new products, and strengthen its management to execute its growth plan.



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