After a year in decline, funding for travel startups increased in the first quarter of 2024, even as the number of current rounds decreased.
by Phocuswright Interactive database of travel startups puts the funding that went to new entrants in the first three months of the year at about $1 billion, a big step up from the figure for the first quarter of 2023 of about $420 million.
Significant shifts have gone into mobility companies like ride-hailing company InDrive, $150 millionand in Nigeria-founded Moove, a company that provides finance to buy vehicleswhich received $100 million in Series B. Meanwhile, Heart Aerospace landed $108 million to help develop its hybrid-electric plan and Cosmic Aerospace announced a $4.5 million seed round.
In micromobility, You attracted another $ 25 million for its e-bike and e-scooter operations, although other companies in the space, including Bird, which entered Chapter 11it didn’t go so well.
Another area that continued to attract investors was the vacation rental space with a technology-driven apartment rental company Bob W receives 40 million euros in a Series B round, while vacation rental startup Overmoon announced $80 million in equity and real estate debt financing. Blue grounda provider of flexible and furnished rentals, announced 45 million dollars in a series D as soon as the fourth approached.
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The technology of the hotel also has an eye with Mews lands $110 million at a valuation of $1.2 billion while South Korea wave announced $10 million in Series B funding.
The business travel space has undergone interesting changes in the last two years with newcomers entering the fray, distribution developments and significant consolidation. Based in Spain TravelPerk announced its $104 million Series D1 fundingwhile United Arab Emirates-based Tumodo has raised $35 million in a pre-seed round. Seeru, also based in the United Arab Emirates, raised undisclosed pre-seed funding.
Additional notable rounds in Q1 of 2024 include €100 million for Visit Group from PSQ Equitywhich now holds a majority share, $10 million for DayTrip and $8 million for social business service Joyned. Smaller rounds were seeded throughout the quarter, including Lokalee ($5.6 million), Holdbar ($3.5 million), Nicer ($2 million) and Runnr.ai with €1 million.
A brighter spot in Q1 was the announcement of a Travel technology fund for Europe called TravelTech.vc. The company announced in January that it was looking to invest 50 million euros in 10 companies.
Path of acquisition
Consolidation was also a big part of Q1 con American Express Global Business Travel’s announcement of its plan to acquire rival CWT for $570 million the outstanding news. Some have already said that 2024 could be the biggest year for mergers and acquisitions in travel technology.
“An inevitable wave of consolidation after COVID should take place while, at the same time, high interest rates have blocked startup fundraising, leading to people having to merge or face closure,” Morgan Lesné, travel manager and partner of Partners Cambon, he said recently. “Meanwhile, record tourism figures for 2023 and a very positive outlook for 2024 leave many players confident that now is the right time to acquire competitors.”
Reports from Morgan Stanley and PWC, although not specific to travel, also indicate the likelihood of an increase in M&A activity in 2024. PWC said that the improvement in the financial markets, the pent-up demand for business and “the need for many companies to adapt and transform business models” is driving the deal. .
In terms of hospitality and pleasure he added“While hospitality and entertainment both businesses have shown declines in volumes and values of business in 2023 compared to the previous year, we expect that the return of tourism to pre-pandemic levels and the preferences of the consumers for experiences will increase the flow of companies coming to the market in 2024.
The distribution giant Amadeus had an active quarter on the procurement front with its purchase specialist in biometrics Vision-Box for 320 million euros at the end of January and Payment specialist Voxel for 118 million euros in March.
Additional M&A activity in Q1 included IBS Software’s acquisition of Above Property Services for $90 million, The acquisition of Uplist by AirDNAGray Dawes’ acquisition of the Dutch travel management company VCK Travel, Stardekk’s acquisition by Lighthouse, Busbud’s acquisition of Buson and the merger of micromobility players Dott and Tier.
A final word on financing and M&A activity in the neighborhood is dedicated to the companies that did not make it. Journera, which was founded in mid-2016 as Dihedral and had raised about $36 million, announced it was shutting down in early February. His story, as told by founder Jeff Katz, can be read here. Meanwhile, Cabana, an RV rental startup that raised more than $10 million, suspended operations in early January. Its founder Scott Kubly share the lessons learned here.
