Riding high to laying low – travel startups in a coronavirus world

Less than two months ago, travel industry startups were riding high.

Throughout 2018, 2019, and into early 2020, investors threw large sums of money at startups focused on disrupting traditional travel segments and digitizing all aspects of the travel search, shop and purchase experience.

At the time, 2018 was a record year in travel funding, eclipsing the previous two years combined. This record was smashed in 2019, where funding surpassed $2 billion. 

2020 was off to a strong start: on February 24, TripActions announced it had raised a $500 million debt facility to support the launch of its new payment’s platform, Liquid.

But just over two weeks later, U.S. president Trump announced his Europe travel ban in an effort to control the coronavirus. Shortly thereafter, the global travel industry essentially shut down and funding has completed dried up. What a difference a pandemic makes. 

Phocuswright has curated and analyzed over 2,500 travel startups since 2005, via our State of Startups report. We have categorized them by industry vertical and horizontal and have tracked funding rounds and exits.

Through the years, we have seen different verticals receive large percentages of available funding. For example, over the last decade, accommodations startups have received just under half of the total funding.

While this percentage is skewed by OYO’s massive $1.1 billion raise in 2018, hotel, lodging and short-term rental startups have remained an attractive target for investors, piqued by the opportunity presented by the fragmented supplier marketplace, relatively high margins, and the ability to deploy B2B enterprise solutions to lodging operators/suppliers. 

The state of travel startups will be completely upended in the coming months:

Funding reported for startups founded during/after 2015

It’s time to ask some questions:

  • Which companies will survive?
  • What tactics will they employ to get them through this dark period?
  • Will B2B startups have a higher survival rate than B2C startups?
  • What happens to funding as we transition into recovery?
  • Will it skew toward certain business models or segments?

Find out more…

Join Pete Comeau along with Boyd Cohen, co-founder and CEO of IOMOB, a promising mobility startup, and Chris Hemmeter, managing director at Thayer Ventures, as they take a deeper look at the current State of Travel Startups and discuss these questions and more on Thursday, April 23, during the Online Travel Conference. 

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