It is undeniable that 2023 was another difficult year for travel startups.
The most cautious approach to investors seen in 2022 was placed in 2023. Just a quarter of the year, total investment (including autonomous vehicle companies) amounted to $ 421 million, a drop in 95% compared to the figure of $ 8.9 billion in the first quarter of 2022, according to the figure Phocuswright search. Total funding for the end of the year at around $ 3.6 billion for travel startups is remotely compared to around $ 14 billion invested in 2022.
The uncertainty in the financial markets, in the middle of the increase in interest rates and job cuts in the wider technological industry, has intensified by the collapse of Silicon Valley Bank.
In a recent LinkedIn post, Lawrence Leuschner, CEO of Tier Mobility, announced that he lost 22% of his workforce. Summarize the climate for travel startupsHe said, “It was an incredibly difficult year for the majority of entrepreneurs, start-ups and scales. This also applies to us at Tier Mobility. High inflation and the cost of living crisis dominated the news in 2023, and the impacts of training the reduction in demand and the confidence of consumers make a commercial environment difficult. Almost all the companies that were previously focused on growth and expansion have written or talked about the net pivot that we had to do to focus on profitability. »»
That said, many startups have attracted investments in the past year, and the main investors of travel technology in January 2022 at the end of the first quarter of 2022 hired tens of millions in the sector. Investors have mainly cited the Total Addressable Market as a reason for the investment.
Quick advance until mid-December and many startups resisted the storm and demonstrated if not the real benefit, then at least one way to profitability. This is the most true in hospitality -oriented companies where the market continues to be considered a potential for enormous growth.
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TECH FOCUS HOTEL AND RENTAL
Hotel and property technology companies ranging from startups offering technological stays and real estate investment companies to development developments and B2B technology players continue to attract investors. Kasa Living, Placemakr and Fractal Homes have attracted $ 70 million, $ 65 million and $ 30 million respectively, while Outsite raised $ 300 million to invest in real estate. Meanwhile, Numa raised $ 59 million and Habyt raised $ 40 million for its cohumism concept.
The house exchange platforms were also under the spotlight, with exchanges of parents and holidays, both of which were funding for $ 15 million.
Startups of the startups of current and former employees of Airbnb, including Samara, collected $ 41 million for its concept of prefabricated houses, and in summer, the rental startup, which collected $ 18 million, plus a facility debt of $ 50 million.
On the front of vacation rental technology, Hostaway obtained $ 175 million with an eye on acquisitions and the real estate management technology Missafir won $ 26 million. And Operto, specializing in automation technology for hotels and rentals, added $ 25 million to its war box.
Hotel technology players also made the headlines with Hyperguest with $ 23 million in July, while Stayntouch, a real estate management technology specialist, recently received an investment of $ 48 million.
However, all startups in the hospitality category did not behave well, Casai calling it in July, the founder and CEO Nico Barawid citing “an investment drought with a model that is no longer favored by the Investors of VC (venture capital) to produce venture capital returns “,” among the reasons for the disappearance of the company.
Discover everything
Earlier this month, the Klook visits and activities provider announced funding of $ 210 and said it had reached overall profitability. Meanwhile, Gotyourguide attracted $ 194 million in funding in June and said in September that he had made a profit during the quarter.
And with such large sums that were invested in late towers, some wondered if public inscription or acquisition could be on cards in 2024.
With an objective slightly different from that of the above companies, fever, which allows the discovery and booking of events in the cities, obtained funding of $ 110 million. And the platform based on MAP Antly, which helps users to find places to go and things to do, has collected $ 18 million.
A number of B2C online travel players have also attracted investment: Worldria, 25 million euros, Weroad, 18 million euros and Traveligo (now called Gother), $ 25 million.
Expenditure management
Corporate travel startups did not attract investment levels from previous years, with the notable exception to the corporate expenditure management start ramp, which had a cycle of $ 300 million. Onfly, a startup for business travel and spending management, attracted $ 16 million, while Bizaway, which also focuses on business travel management, has obtained 10 million euros. More recently, Center, also working on the efficiency of spending management, won $ 30 million.
Startups have often passed under the fintech banner has also bitten the appetite for investors, the supplier of terrapay payments disembarking $ 100 million at the start of the year, and Southeast Asia Youtrip adding $ 50 million to its chests more recently. Suppliers straddling travel and finance, including the Yonder and UTU credit card startup, a company helping travelers make rights to be bought, collected 62.5 million pounds Sterling and 33 million Dollars, respectively.
Earth and sky
Mobility companies, including takeoff and landing startups, electric vertical and autonomous vehicles, also stung the interests of investors in 2023. Archer obtained $ 215 million in August for its EVTOL development, while Lilium won $ 192 million and avoided being issued by the Nasdaq of $ 192 million and avoided being issued from the Nasdaq. Didi Autoomous Driving attracted an investment of $ 149 million, while Cabify sought to electrify its fleet with $ 110 million in funding. The Bus-based Bus-based Bus Technology platform has raised $ 57 million and the specialist in public transport technology via $ 110.
Although there have been discounts in autonomous vehicle companies in recent weeks, more investment in the region can be expected in 2024. Other developments to monitor will be all things the artificial intelligence , although it can be more on the side of mergers and acquisitions, as for recent transactions of Airbnb and Mondee.
2024 Trends
The merger and acquisition activity deserves to be monitored in 2024. A recent mergers and acquisitions launched by Cambon Partners noted a post-pandemic increase in agreements compared to pre-countryic acquisitions.
Investment in sustainable startups, including sustainable aviation fuel startups such as Metafuelles, which has just obtained funding of $ 8 million, will continue. A Recent Study from Amadeus Revealed that Almost Half of Companies Believe they will invest More in Environmental, Social and Governance Initiatives in 2024. Companies like Chooose, Which Raised $ 15 million at the Beginning of 2023 and Helps Travel Busines Find the Best Carbon Footprint Reducing Options , will also draw attention. Chooose is part of a handful of Phocuswire Hot 25 startups in 2023 which obtained funding.
HAS The Phocuswright Conference 2023 Inovia, JetBlue Ventures and Highgate Ventures investors made it possible to know if the boom is dead. Investors have discussed the impact of factors such as high inflation and travel demand on startup financing. They also discussed more realistic assessments, how many startups turn to internal rounds and convertible notes as well as the potential of a greater M&A activity in 2024.
Look at the complete session moderate by Mike Coletta, director of research and innovation at Phocuswright, below.
The boom is dead. Long live the boom! Investors – The Phocuswright Conference 2023