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Hopper joins state’s cluster of Web travel companies

Hopper (above) was founded by former executives of Newton-based TripAdvisor and Expedia. Its competition will include Google.

david l. ryan/globe staff

Hopper (above) was founded by former executives of Newton-based TripAdvisor and Expedia. Its competition will include Google.

Travel is a fast-growing and lucrative segment of the Internet economy, and some of the biggest names in the market, including TripAdvisor, Kayak Software Corp., and Google Inc.’s ITA Software, are in Massachusetts.

Now, a start-up called Hopper has moved to Cambridge to take advantage of the area’s concentration of online travel service companies and software engineering talent.

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Hopper, founded by executives from Newton-based TripAdvisor and the online travel giant Expedia Inc. of Bellevue, Wash., revealed on Wednesday that it had raised $12 million from venture capital firms, including OMERS Ventures of Canada and Atlas­ Venture in Cambridge.

That makes $22 million in venture investment raised so far by Hopper. The company will use its latest funding to continue building its vacation-planning website, set to be launched this year, and to double its Cambridge staff of about 10 people.

“Apart from the fact that Boston is actually the travel tech capital of the world, there’s a great talent pool there,” said Frederic Lalonde, Hopper’s chief executive, who brought the company to Cambridge last month. Lalonde cofounded the company in 2008 in Montreal, where it maintains an office.

Unlike the big brand names in online travel, Hopper won’t sell airline tickets or book hotel rooms.

Instead, it will build a site where users can find out about hotels or faraway destinations, based on the millions of pieces of travel data that are scattered across the Web.

“Many of the travel sites out there are pretty good if you know what you’re looking for,” Lalonde said, but it can be frustrating if you don’t, he added.

Hopper will specialize in a type of service that other travel sites are trying to improve, said Douglas Quinby, the senior director of research for PhoCusWright Inc., a Sherman, Conn., travel research firm. But it will have some big competition — especially from Google, which bought ITA Software for $700 million in 2010 and this week acquired Frommer’s travel guides, a potential source of travel content, for a reported $23 million.

Google did not return a call seeking comment.

“Google is a really tough competitor,” Quinby said. “They have enormous data at their fingertips.”

Yet online travel still has room for newcomers, he said.

PhoCusWright projects that Web travel will grow into a $124 billion dollar industry next year, making up 40 percent of the US travel market. The firm tracked about 200 companies that entered the market from 2006 to 2010, including Bay State contenders like SilverRail Technologies Inc., a Woburn company focused on train travel, and Smart Destinations, a Boston company that sells discount passes to attractions in tourist cities around the country.

“I hear about one to two more [travel] start-ups a week,” said Paul English, chief technology officer of Kayak. The company, which has locations in Concord and Norwalk, Conn., recently went public.

“You have to have an ecosystem of risk capital that is friendly to travel tech start-ups. And in Boston you have that in spades,” said Brad Gerstner, chief executive of Boston investment firm Altimeter Capital, which specializes in travel tech investments, and founder of Room 77, a hotel room search and booking site started three years ago in Boston.

The Cambridge venture capital firm General Catalyst Partners has been a key player in that ecosystem, fueling growth in much of the local cluster. The firm invested in Kayak and ITA Software and last year led a $10.5 million round of funding for Room 77. General Catalyst did not return a call for comment.

But there are other areas of the country with their own friendly ecosystems, including Silicon Valley in California.

Gerstner found fertile ground in Mountain View, Calif., where Google is headquartered. Room 77 moved there in 2010 and hired several former Google engineers who were experts in search technology.

For a travel tech community to take shape, he said, “you just have a lot of engineers and business people who understand a certain vertical.”

Michael B. Farrell can be reached at michael.farrell@globe.com.
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