Significant funding rounds into travel startups and growth companies were few and far between in the second quarter of 2024.
Headline grabbers tended toward later stage investments, including Guesty with $130 million in Series F funding, Cover Genius’ Series E of $80 million and Canary Technologies, which announced a $50 million raise in June.
Other notable rounds went into Fetcherr, which attracted $90 million in Series B funding for its airline pricing and inventory control technology, and Ramp’s $150 million Series D-2 round. Meanwhile, payments specialist Nium attracted $50 million in Series E funding.
Autonomous vehicle and eVTOL development continues to attract investor interest, with Wayve landing $1 billion recently, while Skyports announced $110 million for vertiport development.
Recent data from PhocusWire sister brand Phocuswright revealed that travel funding is tracking a similar pace to 2023 with $3.1 billion raised so far this year.
The travel startup funding scene for the quarter was otherwise peppered with much smaller investments, with Eco.mio, Directo, Holibob, Stippl and Naya Homes among companies attracting pre-seed, seed and Series A investment.
In a recent article published by PhocusWire on the top investors in travel technology in the past year, we asked some of the most active in the sector what they’re looking for. Senior executives from established investors in travel such as Thayer Ventures and Plug and Play, as well as newer investors including Gaingels, listed elements such as unit economics, addressable market, competitive advantages and people as among the most important criteria.
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It was also encouraging to see that investors are bullish about the prospects for travel startups going forward despite the more cautious funding approach and continue to see huge opportunity for value creation in the industry.
Other investors believe the decrease in funding is not necessarily a bad thing. During an interview in the PhocusWire studio at Phocuswright Europe 2024, Gaurav Tuli, partner at F-Prime Capital, said the market is likely to “stay subdued” adding, “These are really healthy levels for the industry.”
What remains in question is whether some of the previous investors in travel such as Accel, Lakestar and General Partners, who have closed their own funds recently, will continue to bet on travel.
Consolidation
While funding is down in the sector, merger and acquisition (M&A) activity is up with many of the startups that have attracted large rounds recently investing to buy up smaller companies. Guesty, for example, announced the acquisition of Rentals United in May, while TravelPerk, which landed $104 million in January, announced its acquisition of Amtrav alongside a credit facility of $135 million.
The TravelPerk-Amtrav news was not the only interesting corporate travel deal during the quarter with the acquisition of Direct Travel by Concur co-founder Steve Singh and a group of investors also piquing interest.
The quarter was also an active one for M&A in the hotel and wider accommodation technology arena with Mews, which announced a $110 million round led by Kinnevik in March, acquiring HS3 Hotelsoftware.
Meanwhile, Lighthouse added HQ revenue to its portfolio, Access Group acquired SHR Group and more recently Duetto was acquired by GrowthCurve.
There was further M&A activity across the airline technology and ground transportation segments. SITA acquired Materna IPS in May followed by Asistim in June. Meanwhile, Travelier acquired Brazil-based Deonibus, Pango acquired Gett and Busbud scooped up revenue management specialist Ratality.
