Snowfall CEO admits to errors but says company is ‘back on track’

Stefan Cars is CEO of travel technology specialist Snowfall

• Since initial publication of this article, a group of Snowfall employees, past and present, has informed BTN Europe they have gone unpaid in recent months and "refute the statements he [Stefan Cars] has made publicly about the financial health of the company related to employee pay, which are fundamentally false". Those claims – and Snowfall's response – are detailed in a follow-up article published here on 9 January 2025.

Stefan Cars, the founder and CEO of UK-based travel tech company Snowfall, has admitted to a series of misjudgements in his running of the company following accusations of poor management, staff going unpaid, and concerns over its ability to deliver on its promises. While Cars adopted a conciliatory tone when he spoke to BTN Europe, he categorically denied any allegations of financial misconduct or misappropriation of funds.

Snowfall, which acquired the lauded PSNGR1 booking tool in August 2022, faced a slew of allegations from employees last year, many of them publicly posted on employment forums such as Glassdoor.com. BTN Europe also received unsolicited communications from former employees and heard the concerns of several TMC partners. Together, their stories painted a picture of a company struggling financially and rather more focused on getting a product up to speed than on selling it.

Speaking to BTN Europe late last year, Cars admitted Snowfall had encountered challenges but insisted the company is “back on track”.

He said a series of “mis-hires”, an inflated workforce and the swift purchase of PSNGR1 had hindered the company’s progress, but also admitted that “under equipped” finance and sales teams had exacerbated its difficulties. Snowfall was founded in 2003, with Cars in past interviews with BTN Europe stressing his ambitions to challenge legacy distribution systems.

“Have I made a lot of mistakes during this journey? Yes,” said Cars. “Have we been overly ambitious? Yes. And do we sometimes find that something we think will take four weeks takes eight or 12? Absolutely. We’ve had a lot of growing pains but we have the full support of our investors.”

Addressing questions about the company’s financial stability, Cars pointed to investment of more than £12 million from Paris-based Korelya Capital, with an additional commitment of £2 million last year. That was complemented by an unspecified investment in spring 2024 from UK-based investor Kingsway.

Cars also said the company would name a new COO “with experience from easyJet” before the end of 2024, but had not done so at the time of publication. “They will be joining an incredible team of leaders such as Régis Blanc, our chief architect, who brings deep expertise from Google, and Anthony Poole, our new head of product, alongside other talented industry experts joining us,” he said.

Smoke and mirrors

Despite Cars’ assertions of stability, it is Snowfall’s complex set-up that spooked one TMC customer who already had frustrations with the company’s “tendency to over promise and under deliver,” according to a representative of the TMC who wished to remain anonymous.

Concerns had been mounting and, when undertaking their due diligence, the TMC found on Companies House – with whom Snowfall is registered in the UK – what they described as “a spider’s web; a complete mess”. They added: “It didn’t look good. If you can’t work out how a company is structured on Companies House then something’s not right.”

According to Companies House, Cars is the director of 18 UK companies, many of which were formed in 2020 and 2021, have variations on the Snowfall name, are individually owned by Cars, and have zero employees.

In March 2024, Snowfall Travel Tech UK Limited received a First Gazette Notice announcing an intention by Companies House to strike the company off, seemingly due to a failure to submit its accounts on time. Cars says that was an administrative oversight.

Snowfall’s most recent accounts, covering the year to 31 December 2022, were filed in May 2024 and the strike notice was subsequently removed. Those accounts revealed liabilities of £186,397, an improvement from £721,598 the previous year. The ultimate holding company, Snowfall Holding Limited, at the end of 2022 had net liabilities of £4.67 million. Its 2023 accounts were due on 31 December 2024 and, at the time of this article's publication, were flagged as overdue.

For the TMC partner with which BTN Europe spoke, its concerns deepened when it brought its implementation team together with Snowfall’s tech team and “really lifted the lid on the booking tool” which by this time had been renamed as Junction One.

“When we really looked at the tool it could only do a small amount of what we needed it to do – there was no NDC content, no Expedia content, it only took card payment... a lot of the normal functionality you’d expect from an OBT just wasn’t built in.”

They continued: “It was disappointing. We’d been excited and the tech looked really good, but it felt like there was nothing actually there. It was all smoke and mirrors.” For the TMC, which had also heard rumours of staff going unpaid or being made redundant with no compensation package, it marked the end of their partnership.

It was a similar story for another company who spoke to BTN Europe on the condition of anonymity, praising the tool’s interface but ultimately left in limbo. “There was certain functionality we asked for which hasn’t been delivered yet, but we’re still hopeful we’ll get there,” they said. “The UX is great. Visually it’s all good and from what we could see on the demo site the functionality was all there. The roadmap looked amazing and we still really want them to succeed, but it feels like there have been some empty promises so far.”

Meanwhile, one former Snowfall employee with senior status at the company told BTN Europe that they were “sent to Coventry after causing too much friction”. They had repeatedly raised concerns about the company’s direction and a lack of investment in winning new business, they said, which culminated in an acrimonious end to their time at Snowfall.

“There was a lot of money being spent but little being achieved,” they told BTN Europe. “We needed revenue but there was no focus on generating business – it was just build, build, build.”

They were among the first to leave the company ahead of a swathe of resignations and redundancies, they said, adding that they were not properly remunerated but met with a “wall of silence in my battle to get paid”.

Addressing the accusations

Responding to comments about the company’s complex set-up, Cars said it is the nature of a global business. “Our first financial director set up numerous entities. Certain of those are now being folded and a lot of them are idle. I think early on there were some savings to be made on business relief rates and things like that. We are cleaning that up heavily.”

Cars confirmed the company went through “quite heavy restructuring” last spring when it laid off “quite a few people”. The 130 employees it had at one point was “too much,” he said. Today it has around 75, still more than double the number stated in its 2022 accounts. “We did a reset but what tech company hasn’t made some layoffs in the last 18 months?”

He also admits the company is in disputes with some of those it laid off regarding their settlements but says Snowfall has “the best support from [law firm] Dentons… we are not doing things from the hip.” Cars also said all current employees are paid up to date.

He attributes some of Junction One’s shortcomings to the speed at which it moved to acquire PSNGR1 – an opportunity Cars believed would help “fast-forward” the work that Snowfall was already undertaking to develop a booking tool.

“We actually tried to talk to them [PSNGR1] a year before the transaction happened. They wanted a ludicrous amount of money at that point as every tech company in the world did in 2021,” said Cars. “But when they ran out of money we made a quick deal. We didn’t have any time to do any proper technical due diligence because they were insolvent at that point.”

While the purchase price reflected PSNGR1's status, Cars also claims they did not get exactly what they were expecting. “It soon became clear that some of the technology might not have been the most modern,” he said.

“We took over when a lot of promises had already been made by the previous founder [Chris Moss] which ultimately the product didn’t stack up to. We had to have some difficult conversations [with customers]. I was probably not great at managing the transition and making sure we had the right team.”

Junction One is only one element of Snowfall’s tech offering, which is largely focused on helping airlines increase their distribution reach and on aggregating content from multiple sources of transport via an API-based platform. Cars said Junction One accounts for only 15 per cent of Snowfall’s transaction volume.

It has 70 companies consuming its content and technology, he said, including tour operators, TMCs and “one of the biggest fintechs in the world” which “has its own internal TMC and we just added them on.”

It was a poorly kept secret that Tesla had shown interest in PSNGR1 in its early days, and although that relationship stalled before he took ownership of the booking tool, according to Cars, Snowfall has reinitiated talks with the company. “They love the product… but I think there was a clear disconnect between some of the things they were doing and what Chris [Moss] had maybe promised,” said Cars.

While he remains confident in Snowfall’s vision of disrupting the travel industry’s legacy systems, Cars concedes the company has lacked some commercial nous in the past. “Maybe that mindset was missing… we’ve been frugally run in that sense. Our company is 80 per cent product and engineering – there’s not a lot of sales guys in our organisation.”

For now, Snowfall’s future hinges on its ability to rebuild trust with its partners, win new business, and deliver on its ambitious promises. Significant announcements are expected in due course.

• Article written with additional input from BTN Europe contributor Mark Frary