If the first quarter of 2025 proved lackluster for travel startup funding with only about $1 billion going into newcomers in the space, the second quarter slipped further.
It seems all the headlines around tariffs as well as the political uncertainty and global conflict may have put investments on hold, with only about $800 million going into travel startups, according to Phocuswright’s Travel Startups Interactive Database.
If funding levels continue along this trend, the total come end of 2025 could be around $4 billion, significantly less than 2024’s $5.5 billion and a far cry from 2021’s record $16 billion.
Travel technology companies that did announce significant rounds in the quarter included Ramp with $200 million, Canary Technologies with $80 million, $60 million for Fora, a PhocusWire Hot 25 Startup for 2023, and €46 million for Holidu. Onfly, a PhocusWire Hot 25 Startup for 2022, also bucked the trend when it announced $40 million in mid-April.
Most other rounds were below the $10 million mark, with the exception of Tern, the travel adviser platform, which secured $13 million in Series A funding in May. Others that managed to unlock investment in the quarter included travel eSIM provider Kolet, which landed $10 million in a Series A round, Chatlyn, which announced €8 million and Unravel, which secured $7 million in Series A funding.
About two-thirds of travel entrepreneurs have acknowledged that the funding climate is either very difficult or somewhat difficult, according to preliminary findings from a global survey shared at Phocuswright Europe last month.
A glance back at the second quarter of 2024 reveals there were more headline grabbers, including Guesty and Fetcherr, for example, landing larger rounds than there have been more recently. That could be down to factors including global economic instability as well as uncertainly around what’s real when it comes to artificial intelligence (AI).
The ability of travel startups to spin up something more rapidly using AI and AI-driven tools is likely to be making investors think twice about who they’re willing to invest in and how much they should commit.
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Marc Andreessen, general partner of Andreessen Horowitz, released some career advice for those living in the rapidly evolving AI era, recently saying, “Series C to E companies are the current sweet spot: enough traction, still lots of upside.”
Enough said? It doesn’t mean travel startups cannot attract pre-seed and seed rounds, but they are few and far between. Juno with $2 million, Travaras with $1.4 million and Airial Travel’s $3 million are three that have managed to attract investment in recent months.
Broadly speaking, the top travel tech investors seem upbeat about the next few years for startup funding.
“I’m optimistic, especially at growth and later stages, but that capital will flow earlier over time. The market has matured. Capital is more travel-literate. Scale outcomes are now real. The path from idea to IPO is clearer, and travel tech has evolved from niche to full-blown category,” said Gaurav Tuli, partner at F-Prime Capital in PhocusWire’s recent top investors in travel tech in 2025 article.
M&A activity
Lack of funding can drive startups to seek an exit through mergers and acquisitions (M&A), but there does not seem to have been a flurry of activity in this area in Q2.
However, Kinnevik, a venture capital company which has invested in TravelPerk and Mews, reported “encouraging” signs of increased M&A activity and potential public listings generally in its Q2 earnings in early July.
Notable acquisitions in the quarter included Marriott’s deal to buy CitizenM for $355 million and Sabre’s deal to offload its hospitality business unit to asset management company TPG for $1.1 billion.
JetBlue Airways selling JetBlue Ventures to aviation investment firm SKY Leasing for an undisclosed sum also caused some chatter in the industry around the current appetite for corporate venturing.
The airline’s CEO Joanna Geraghty said at the time that JetBlue is focused on its “JetForward” strategy, which aims to return the carrier to profitability.
Further deals in the quarter included Lighthouse scooping up marketing tech specialist The Hotels Network as well as Duetto’s acquisition of HotStats. Elsewhere across the travel industry, Juniper continued its recent spree with the acquisition of RezMagic while HBX, which went public in January, announced it had bought Civitfun.
Although there are rumors of a number of other travel IPOs in the offing, business travel platform Navan has been the only company to confirm recently.
The lack of funding for travel startups as well as the scarcity of exits were discussed during a recent interview with Nick Cocks, founder and managing partner of Singapore-based Velocity Ventures. He touched the current attitude to risk, boardroom paralysis and IPOs being shelved.
See below for the full session with PhocusWire’s Linda Fox:
Phocuswright Europe 2025 Executive Interview: Travel investor sentiment
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