Funding for travel startups recovered slightly in 2024, advancing to $5.8 billion from $5.3 billion in 2023, according to Phocuswright's research report The AI-Native Edge: Travel Startups 2025. But both years represented 10-year lows, significantly under the previous low of $6.6 billion in 2016. This reality arrives after a record high of $16.3 billion in 2021.
Through the third quarter of 2025, funding sits at $3.5 billion, a warning sign that the year will wind up hitting another new low, likely coming in under $5 billion.
Deal count (the number of funding rounds completed) sits at 161 through for the third quarter, a far cry from a decade ago when yearly totals averaged around 1,000. This continues a downward trend since 2020 when rounds dropped below 800 and have continued dropping each year. At this pace, there will be just over 200 rounds for the year, also representing a new low.
Shrinking deal count highlights the concentration of funding that is occurring: Of the 3,528 companies analyzed that have raised funding, 209 companies have raised over $100 million, totaling $81.9 billion. This represents a whopping 83% of total funding from just 6% of companies.
Phocuswright's Travel Startups Interactive Database
This year’s report draws on Phocuswright’s proprietary database of more than 8,000 companies (available to Phocuswright research subscribers or for a la carte purchase) and a global survey of 150 founders.
Together, these data points provide a candid picture of where the sector stands: undercapitalized and overhyped but full of optimism. Just as past downturns set the stage for the next wave of category leaders, today’s uncertainty may prove to be fertile ground for the travel disruptors of tomorrow.