All travel tech startups face challenges in launching, landing funding and balancing growth with profitability – especially in an uncertain economy.
Sustainability-focused startups are no exception. Moving the needle on the environment can seem especially daunting in the face of steadily rising emissions and alerts portending the planet’s demise.
But founders of environmental startups know that where there are challenges, there are also opportunities. And the possibility to make a difference rises in correlation with the demand for eco-friendly travel.
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Suzanna Chiu would know. As the head of Amadeus Ventures, the strategic funding program that invests in early-stage travel startups for the global distribution system giant, she’s seeing an increasing number of sustainability focused startups.
“We recognize that sustainability in the travel
industry is a global challenge and only by working together will we be able to
provide global solutions,” Chiu said.
Among the hot ideas Amadeus Ventures has been pitched are carbon offsets and capture, sustainable aviation fuel and flight operations optimization – including flight route and weight optimization, pilot behavior and food waste.
Another popular topic is electrification – from electric vertical take-off and landing (eVTOL) aircraft to growing adoption of electric ground vehicles and corresponding charging infrastructure.
“Sustainability startups face similar challenges to new businesses working on emerging ideas where the actual size of the addressable market and consumer behavior is highly uncertain,” Chiu said. “They may face a regulatory or public policy environment that changes constantly or incomplete legislation that requires private companies to improvise on implementation.”
Some sustainability startups are working on “deep tech topics” that may have a relatively long payback period beyond the scope of typical venture capital, Chiu said. For example, topics like electrification and hydrogen that require certifications take time, so matching the right funding source to support such deep tech investigation would be key to its success.
Below, some leaders at startups in the space discuss why their work is so critical, how they generate interest and partnerships and how they overcome obstacles. Their responses have been edited for clarity and brevity.
With its solar-powered cabins across Europe and the United Kingdom, Unyoked seeks to immerse its customers in nature to help them experience living with a minimal footprint. The larger goal is that travelers will return home and take steps to minimize their impact or vote to put in place positive environmental policies.
“Our humble mission is to help more people get to nature more often,” CEO and co-founder Cam Grant said. “Education is a big part of this. If we can honestly say that we’ve helped people realize how nature can help them, and in some way contributed to a behavioral change where they now go for hikes more often or even stop to look at a tree in a park when they’re stressed, that’s a win for us.”
The company — which recently announced €18 million in funding to expand solar-powered cabins — sees its mission as more than just showing travelers a good time on their vacations. Unyoked hopes its clients will take back home with them something that they found on their adventure.
“Many people still think of going off the grid as a holiday,” Grant said. “Our challenge will be to help them understand that it’s more than just a vacation; it helps us personally and professionally. We want people to realize that it’s something they should build into their days, months and years – not something they just wait for their next holiday to experience.”
BookSmart24 integrates schedules and booking data from leading train and high-speed train operators around the world. Its platform generates sustainable travel itineraries that combine trains and planes or an outright rail route where trip duration and price justify taking a train over a plane.
Typical itineraries consist of a train route rather than a short-haul flight from the traveler’s point of origin to a major hub airport, where the passenger catches a flight for the long-haul leg to the destination. BookSmart24 evaluates parameters in real time during a user’s travel search and compiles and displays recommendations based on the following criteria: lowest environmental impact, price and overall travel time.
The combined train/plane functionality will be available as a B2B offering to online travel retailers worldwide. The BookSmart24 application programming interface is scheduled to launch in 2024.
“The biggest challenge we face is obtaining sufficient financing for growth,” CEO and founder Matthias Albrecht said. “We are actively in the market to attract funding partners to assure that we can meet our goal in a timely manner.”
As more individuals and corporations express a willingness to pay for more sustainable travel, the mission at Chooose is to build climate software solutions to close the gap between climate intention and action by accelerating the transition to new and more sustainable fuel, increasing climate financing and supporting new solutions reducing emissions. The company is a PhocusWire Hot 25 Travel Startup for 2023.
Many of Chooose’s partners in the travel and transportation sector have outlined pathways to net zero by 2050. By providing the tools they need, Chooose aims to play a role in driving climate action at scale. It all begins by connecting its partners and their end customers to solutions that are readily available today.
“We are just getting started, and we’re never better than the next solution we deploy,” said company CEO and founder Andreas Slettvoll. “We’re extremely motivated to continue building something no one has built before. That’s probably the secret sauce in keeping up our momentum.”
Amadeus Ventures announced in 2022 it was investing in Chooose and the company landed $15M in funding in January. It has also lined up several partners, including JetBlue, American Express Global Business Travel and Booking.com.
Postcard Travel Club
Postcard Travel Club uses a suite of community-based products and storytelling to connect travelers with boutique hotels, tour operators and others that promote responsible tourism. The company’s larger goal is to help create a global community of mindful travelers and offer more value added services to help drive deeper connections, make more local impact and collectively advance the cause for mindful travel.
“Like all startups, we face challenges with regards to marketing, media exposure, capital and industry connections,” CEO and founder Amit Jaipuria said. “That said, given the interest and signals we are picking up from key stakeholders in the industry, we are confident that we will be able to overcome these limitations and become a significant player making a positive impact in promoting mindful travel and responsible tourism in the years to come.”
ClimateTrade’s marketplace offers verified carbon offsetting programs and renewable energy certificates for businesses. While hospitality is more of a voluntary market for now, the company anticipates more rigorous standards and requirements are coming to both Europe and North America.
“A lot of companies are very interested in providing the choice to their customer to be able to reduce their impact. They also want to be able to show that they’re taking action to protect the planet,” chief commercial officer Will Darrah said.
“ClimateTrade is not in a transactional based business, where I just sell you carbon offsets like a broker and walk away,” he said. “We build a long-term relationship with you so that when regulation changes, when projects change, when there are new innovative projects that are occurring, we’re on the forefront of bringing those projects to a marketplace.”
The recent acquisition of Team Climate and its subscription-based model for people who want to act against climate change helps the company pursue a broader vision. ClimateTrade has a calculator that’s available online to help customers understand their monthly carbon footprint along with the cost of addressing it.
“Many companies feel that there is a large cost to sustainability and to become sustainable there's this cost that [they are] going to have to incur,” Darrah said. “But I think that they are quickly realizing that their customers and their guests want to take action alongside them and support them in this initiative. And that's where we can help.”
Trees4Travel is a “tech for good” company that provides carbon management technology to calculate and help reduce emissions. And it plants trees.
The company’s technology uses data from planned trips to calculate carbon emissions, then translates trips to trees as a tangible way to understand the impact of travel. Every tree that is planted is then backed up with a share in a United Nations Certified Emissions Reduction renewable energy carbon credit that offsets the carbon that’s emitted. Users can track their trees and learn about the benefits to local communities, the restoration of biodiversity and follow the creation of the forest as it matures, helping with the drawdown of carbon but also reducing the carbon emitted by their travel.
Along with the usual hardships startups can face, Trees4Travel faces a challenge in educating people about the importance of off-setting programs even as the world pursues higher-profile solutions like sustainable aviation fuel and electric or hydrogen-powered airplanes.
While CEO and founder Nico Nicholas said he believes “nature-based SAF is the future of air travel,” he also sees carbon offsets as a powerful tool while the world waits for new technologies to be implemented.
“Travel is a difficult industry to decarbonize, and although there have been skeptics around offset programs, the right high-quality projects can mitigate the immediate impact on the environment,” he said. “Any carbon we can prevent from going into the atmosphere and any carbon we can remove from the atmosphere will help.”
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