A couple of Manchester-based graduates have successfully launched the B2B travel-tech platform Arcube, with Etihad Airways as its first customer. In conjunction with the launch, Arcube is announcing a £1.2m seed round to further develop the platform and its services, co-led by Fuel Ventures and Oxford Capital.
Reddy and Lowe are originally from India and the Isle of Man respectively. It was during their frequent flights to Manchester that they first discovered the shortcomings of airline loyalty schemes. Following conversations with multiple airlines, the team came to the conclusion that current programs only benefit the top 5% of flyers. The vast majority of travellers virtually never accumulate enough points to make any use of them.
Using a combination of funds secured through previous exits, grants, and awards, the pair, at just 18 years old, set sights on building Arcube to address this issue by providing a new form of airline loyalty—one that works for everyone.
While still in their first year of university, Reddy and Lowe sent a simple, cold email pitch to the Etihad Airways London office—the likes of which are often sent with little expectation of a response. In the case of Arcube, however, the proposition stood out to an extent it garnered significant attention.
After a reasonably short negotiation period, particularly when dealing with an entity that employs over 10,000 people, the deal was done. In the two years since, and during the remainder of the founding pair’s stint at university, Arcube’s platform has enabled 1,300 Etihad passengers to customise their travel experience, significantly enhancing passenger satisfaction, driving £1.3m in extra revenue for the airline, and increasing the average customer spend by 10.3%.
Arcube is the world’s first post-flight solution for airlines to upsell ancillaries, tailored specifically to the customer via the AI-powered analysis of hundreds of data points. For example, a passenger flying out of London Heathrow, known for its notoriously long security queues, might be offered a fast-track security pass for their next flight, redeemable with loyalty points. This turns an otherwise frustrating experience into an incentive to rebook with the same airline. These ancillaries lock a passenger into the airline’s ecosystem and significantly increase the likelihood that they return to the airline.
A host of loyalty schemes and point accumulation programs have been rolled out across virtually all operating airlines, at an expense of billions of dollars. These often fail to promote customer loyalty as intended; in general, the amount of travel and points required to unlock any real perks far exceed what the casual holidaymaker is likely to accrue. Indeed, the recently revamped points scheme announced by British Airways faced criticism for not catering to the typical leisure or small business traveller, with one expert calling the system ‘ludicrous’. Reception of the scheme later caused the airline to revisit the changes.
The dominance of price comparison sites has exacerbated the issue; the race to offer the lowest prices has driven ticket prices down 54% since 2013. As a result, airlines have looked to ancillaries to make up more revenue than ever before, up to 56% in some cases, and £120bn collectively in 2024. Via Arcube, airlines can offer ancillaries in an entirely new way, driving revenue as well as customer loyalty.
Both Reddy and Lowe already claim the title of serial founder, having built and sold companies aged just sixteen to fund their university education. Via the work undertaken with Etihad, the two have proven the benefits of a loyalty program designed for the many, rather than the few.
Now based at Sister, Arcube will continue to be supported by the university ecosystem via Unit M, the University’s newly established innovation capability, which will connect Arcube into the University’s R&D and skills capabilities to accelerate its scale-up journey.
