Vacation Fund

In January 2017, Erica Pearson, BCom’14, started Vacation Fund as a way to help people save for holiday travels. A year later, she changed her strategy: Rather than cater to individuals, she decided to work directly with companies in order to help their employees save for vacations. The result: increased growth for the Toronto-based startup. We caught up with Pearson, Vacation Fund’s CEO (and recipient of the 2018 Valerie Mann, BCom'86, Dare to Dream internship), to see how her venture is evolving. 

How did you come up with the idea for Vacation Fund?

I saw people joining bucket-list platforms. People were laying out all the trips they wanted to take in their life, and I thought, ‘Well, that's great, but if you're not working towards those goals, then what's the point?’

My dad was a big inspiration, too. When I was growing up, he wouldn't spend money. He was very frugal. [But] he took our family on three trips a year. By the time I turned 22, I'd been to over 40 countries. I look back now and think that was about as incredible a childhood as I possibly could have asked for. People have started to catch on to this idea that experiences make you happier than stuff does. 

How does Vacation Fund work? 

Vacation Fund is an employer-matched travel savings program. It allows employees to direct a portion of their paycheque into a separate vacation-fund account. Companies match a portion of their employees’ contributions and pay us a subscription fee based on the company’s size.

Vacation Fund may be one of the few benefits that smaller companies offer. And for some larger companies, it may replace another employee benefit. The feedback we keep getting is that this is one of the few benefits applicable to 100 per cent of the employee base, regardless of age, gender, income bracket or marital status. No matter who you are, you are expected to take some time off. 

You initially targeted individuals, then switched to marketing to companies as an employee benefit. Why the change?

We started asking our users what prevents them from going on vacation, and 50 per cent said, ‘I don't have the budget,’ and the other 50 per cent said, ‘I don't think my boss wants me to take time off.’ Around that time, I was pitching to tech CEOs in Toronto. They started asking if they could put money towards their employees’ vacation funds to show them that they actually expect them to take time off. It was just kind of a perfect storm of both sides telling us that Vacation Fund needed to be an employee benefit.

How has the shift impacted your business?

We started receiving far more interest. We started a test run with six smaller companies in 2018, and now we are in the process of onboarding a 300-person fintech company in Toronto. More and more companies are paying attention, and we’ve been getting inquiries from as far away as Germany, as well as across the U.S. and Canada. 

What’s next for Vacation Fund?

By early 2020 we would like to have almost 20,000 employees using our platform. That will involve a few bigger companies coming on board. Our goal is to do some integrations with payroll providers, so that smaller companies can take advantage of more of a self-serve onboarding experience, and then focus our efforts on converting medium- and large-enterprise leads. 

Longer term, we would like to see a version of the platform that helps people estimate their trip costs and choose a contribution amount that makes sense based on the kinds of trips they want to go on. We see a lot of opportunity around knowing people’s travel goals, showing them offers that are aligned with those goals, and making some commission on the travel side.