Lauren McLeod claims to be the first Australian to cross Mongolia”s Gobi
Desert entirely on foot, but arguably her biggest success came after hotfooting
it to San Francisco where her startup has just raised $800,000 and been
accepted into the most prestigious start-up accelerator in the world.

McLeod is the co-founder of Flightfox, which connects a global network of
flight booking experts (about 500 so far) with those seeking flights. Unlike
travel agents, which earn commissions from travel providers, Flightfox experts
get paid a flat fee by the traveller, and only when they find them the best deal.

The 27-year-old from Sydney, who grew up in Canberra, seems built for the
rough and tumble of start-up life, covering 30km a day for two months on last
year”s Gobi trek while wearing the same clothes and watching fellow trekkers
pull out due to sickness and injury along the way.

“This is tough, really tough, but what doesn”t kill you … yes, I feel
much much stronger,” she wrote in a blog post
about her journey.

FlightFox was among the latest round of companies in the Australian start-up
incubator, Startmate, but moved to the US within three months of incorporation.

It has now been accepted into the YCombinator mentoring program in Silicon
Valley, which other Australians such as 99dresses founder Nikki Durkin have
already participated in.

McLeod has just raised $800,000 in financing, and while many entrepreneurs
have complained about being unable to find funding in Australia, half of the
$800,000 came from Australian investors including Mick Liubinskas from
Pollenizer.

Australian travel startups are taking off, with Melbourne-based travel search
engine Rome2Rio
securing $450,000 last month from Australian and overseas investors. Unlike
other travel search sites, Rome2Rio includes not only flights but options for
train, bus, ferry and driving.

Rome2Rio is remaining a Melbourne-based company – “US investors we
spoke to all wanted us to relocate – but we wanted to stay in Melbourne,”
said CEO Rod Cuthbert – but Flightfox won”t be heading back to Australia any
time soon. Like all the other Startmate companies in the latest batch, they”ve
incorporated in the US.

“It”s not about the money, it”s not about a labor shortage, and it
certainly isn”t about access to foreign markets,” said McLeod, who has
previously created and sold another travel site, Globetrooper.

“Instead, this supposed “brain drain” is all about Silicon Valley
having the richest and most meritocratic startup culture on the planet. If you
care at all about tech startups, it just makes sense to spend time here.
Imagine learning French and never travelling to France.”

McLeod says she has travelled far and wide across six continents – the Gobi
Desert trek covered over 1600km –  but she had always had difficulty
navigating the maze of airlines for each country and figuring out how to secure
the best deals.

The idea for FlightFox came while McLeod was in La Paz, the capital of
Bolivia.

“I envisaged flight experts all over the world competing against one
another to find me the absolute best flight,” she said.

“They”d use industry software, local offers, and tricks of the trade to
uncover the lowest prices.”

So that”s exactly what she built, with fellow Australian co-founder Todd
Sullivan.

Users enter their trip details and commit a small finder”s fee of $29 for
simple flights or $49 and upwards for complex flights.

The experts in the FlightFox community then compete against one another to
find you the best flight. Since they work for a fixed fee and not commissions
they are able to recommend airlines that don”t pay commissions, such as budget
providers.

McLeod says the other big advantage of FlightFox is that it uses humans to
find the deals, not machines. She says regular flight search algorithms only
work for the simplest of flights.

To illustrate, she gave the example of a June 2012 trip from Taiwan to
Denmark, Denmark to France, then back to Taiwan. Expedia quoted $5,881, Kayak
couldn”t handle the query, a travel agent quoted $2950 and a Flightfox expert found a deal
(with a more convenient route) for $1490.

The most interesting FlightFox customer request, McLeod said, came from
someone wanting to move to another country with three cats.

“Imagine trying to achieve this with a flight website or travel agent.

The amount of effort in learning the rules about traveling with cats far
outweighs the potential commissions,” she said.

“But this is the beauty of crowd-sourcing. A number of Flightfox
experts had travelled with pets. They knew all the regulations to help the
flyer book quickly and inexpensively.”