There were few large funding rounds for travel-related startups and growth companies in Q2 2024.
Notable companies leaned towards later-stage investments, including Guesty, which raised $130 million in Series F, Cover Genius, which raised $80 million in Series E, and Canary Technologies, which announced a $50 million raise in June.
Other notable rounds include airline pricing and inventory management tech Fetcherr, which raised $90 million in Series B funding, and Ramp, which raised $150 million in a Series D-2 round, while payments specialist Nium raised $50 million in Series E funding.
Autonomous vehicle and eVTOL development continues to attract investor interest, with Wayve recently raising $1 billion and Skyports announcing it will put $110 million into developing a vertical take-off and landing site.
New data from PhocusWire sister brand Phocuswright revealed that travel fundraising is on pace to be similar to 2023, with $3.1 billion raised so far this year.
The travel startup funding scene this quarter was peppered with smaller investments, with companies like Eco.mio, Directo, Holibob, Stippl, and Naya Homes raising pre-seed, seed, and Series A funding.
In a recent PhocusWire article about the top travel tech investors of the past year, we asked some of the most active investors in the space what they’re looking for. Senior executives from major travel investors like Thayer Ventures and Plug and Play, as well as newer investors like Gaingels, cited factors such as unit economics, addressable market, competitive advantage and talent as their most important criteria.
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It is also encouraging that investors, despite a more cautious approach to fundraising, remain bullish on the future prospects of travel startups and continue to see significant opportunities for value creation in the industry.
Other investors don’t think the decline in funding is necessarily a bad thing. In an interview at the PhocusWire studios at Phocuswright Europe 2024, Gaurav Tuli, a partner at F-Prime Capital, said the market is likely to “remain depressed,” adding that “this is a really healthy level for the industry.”
The question that remains is whether some of the travel industry’s older investors, such as Accel, Lakestar and General Partners, which recently closed their own funds, will continue to invest in the industry.
Integration
While funding in the sector has declined, mergers and acquisitions (M&A) activity has been strong, with many of the startups that have recently raised larger funding rounds investing in acquiring smaller companies. For example, Guesty announced the acquisition of Rentals United in May, and TravelPerk, which raised $104 million in January, announced the acquisition of Amtrav along with a $135 million credit facility.
Travel Park and AmTrav weren’t the only interesting corporate travel deals in the quarter, with the acquisition of Direct Travel by Concur co-founder Steve Shin and a group of investors also garnering interest.
The quarter was also an active one for M&A in the hotel and lodging technology sector, with Mews announcing its acquisition of HS3 Hotelsoftware in March in a $110 million funding round led by Kinnevik.
Meanwhile, Lighthouse added HQ revenue to its portfolio, Access Group acquired SHR Group and, more recently, Duetto was acquired by GrowthCurve.
Further M&A activity took place in the aviation technology and ground transportation sectors, with SITA acquiring Materna IPS in May, followed by Asistim in June, while Travelier acquired Brazil-based Deonibus, Pango acquired Gett and Busbud acquired revenue management specialist Ratality.
