Report Overview
Venture capital investment in the travel industry hit a decade low in 2023, with just $2.9 billion of funding, as compared to $5 billion in 2022 and $9 billion in 2019. This decline mirrors the struggles of the broader venture capital market amid a challenging macroeconomic climate, characterized by interest rate hikes, increased market volatility, and declining valuations. There’s a noticeable shift towards later-stage, mature companies, with 2023 seeing a drop in venture capital funding across all deal stages except late-stage Series F, indicating investors’ preference for safer bets.
Despite the downturn, there are signs of recovery. Preliminary 2024 data suggests a year-on-year increase in travel venture capital funding, with fewer but larger deals anticipated. We are also seeing the investment landscape becoming increasingly more fragmented and shifting Eastward, with more funding coming from Asia and the Middle East. By themes, we are seeing growth pockets in tours & experiences, AI & automation, and hospitality employment – hinting at areas of sustained investor interest amidst the overall decline.
What You'll Learn From This Report
- The size of the travel startup financing market from 2009 - 2023, with projections for 2024
- 2023 funding by deal stage, region, company and sector
- Key 2023 funding trends in travel startups: tours & experiences, corporate travel and expense management, property management technology, short-term rentals, OTAs and AI automation & predictive analytics, amongst other thematic buckets