The second quarter of 2026 has not been an active period for travel startup funding.
Investments that have been announced have tended toward seed funding or Series B, with one notable Series C.
Only two Series B rounds stand out for the quarter from April to the end of June: Hotel technology company Smartness landed €47 million, and The Hosteller, an India-based hostel company, announced $16 million.
The most notable Series C round was secured by WeRoad, with Airbnb leading the $58 million investment.
Also noteworthy was Clarasight's Series A round of $11.5 million, which it plans to put towards product development and geographic expansion.
Despite the seeming lack of funding in Q2, investors are bullish about the funding outlook in the coming months. The potential for artificial intelligence to drive further digitalization of the industry is exciting as investors continue to make more bets than they traditionally might have
Figures from Phocuswright's Travel Startups Interactive database also build a brighter picture, with funding of $1.7 billion for the first five months of the year, up from $1.1 billion in 2025.
M&A updates
Mergers & acquisitions in travel have created more of a buzz in Q2 than most funding stories. Expedia Group's acquisition of CarTrawler is a stand out example. The deal, which is expected to close in the second half of 2026, helps the online travel giant develop its "one-stop shop for B2B travel," the company has said.
Other notable M&A stories include Juniper's acquisition of Deem as it continues to build out its ecosystem of travel technology companies. Meanwhile, Lighthouse acquired Hotelrank.ai in the quarter as part of its effort to build out its hotel operating system.
Specialists in M&A such as Morgann Lesné from investment bank Cambon Partners said the volumes of deals seen in 2022 and 2023 are not back yet, but there is plenty of room for consolidation as "small players have to join forces."
In an interview in the PhocusWire Studio at Phocuswright Europe 2026, Lesné cautioned, however, that the large online travel agencies such as Expedia and Booking Holdings aren't "buying small things."
"They have to buy things that move the needle. Often people get it very wrong about whether they're sellable to these big boys—the bar is super high. You need to be worth hundreds of millions to be interesting to these people."
He went on to discuss some of the potential dynamics of the CarTrawler deal, with the company's investors likely thinking the uncertainty in 2026 made it a bad year to sell.
"So it could only be a preemptive situation that made them change their mind. In private equity, wanting to exit usually goes through a process, they hire a banker—but in 2026 there's no rule. The rule is no rule," Lesné said.
Bigger deals shaking up the M&A landscape include Long Lake Management's acquisition of American Express Global Business Travel for $6.3 billion. Meanwhile, easyJet's board has said it has agreed to a $5.7 billion takeover by private equity firm Apollo Global Management.
Despite some interesting activity, Lesné does not see 2026 shaping up to be a big year for M&A deals but believes there could be more "preemptive approaches" akin to the Expedia-CarTrawler deal.
He also discussed the travel segments he's watching, what's happening with valuations and AI causing market confusion.
See below for the full discussion with PhocusWire's Linda Fox.
Merger & acquisition trends in travel