In August, we previewed some of the findings of Phocuswright’s State of Travel Startups 2018 report and learned that the number of travel startups being founded has slowed in recent years, while the market has shifted to acquisitions and funding of the breakout winners in emerging categories.
The full report - The State of Travel Startups 2018 -has now published. As with all annual State of Travel Startups reports published since 2012, it takes an in-depth look at travel startup trends, including regional analysis, funding levels and categorical focus.
PhocusWire's sister brand has spent the past 10 years tracking some 1,800 travel startups, and this year’s report finds that travel startups founded between 2008 and the first half of 2018 have seen $19 billion come their way through either funding rounds or acquisitions.
Since our August preview, the report’s authors, Michael Coletta and Chetan Kapoor, decided to make a major change to the methodology.
The total amount of funding to travel startups previously reported was $84 billion, but the updated report excludes ride-hailing, taxi-hailing, and bike and scooter sharing companies (e.g. Uber, Didi Chuxing, ofo, Go-Jek etc.) from the analysis, which paints a very different picture.
Coletta says: “Uber and Didi Chuxing alone have raised $45 billion, and when added tothe other 130+ride-hailing, taxi-hailing, and bike and scooter sharing companies we’ve tracked, their collective funding exceeds $75 billion over the last ten years.
"While these companies are certainly relevant to travel, we decided to stop including them in our top line report funding figures because they skew the picture so much and their impact is far greater on a local level than on tourism.”
According to the updated research, Airbnb is by far the top-funded travel startup, accounting for almost one-quarter of the $19 billion tracked. Furthermore, the top 10 funded companies make up 41% of the funding total.
Other findings from the report include:
- The growth rate of funding to travel startups has contracted each of the last three years
- Funding to B2B companies has grown faster than funding to B2C companies in the last two years
- The most travel startups have been founded in North America over the last ten years, but companies in Asia Pacific have now raised the most money
- The top-funded vertical categories are Lodging, Private Accommodation and Car Rental
- One in four companies tracked have closed, while 11% were acquired
- The majority of travel startups have closed in the categories of Inspiration (51%) and Social networking (58%)
The report provides detailed analysis of these and other trends, including an expanded focus on the Tours & Activities and Ground Transportation verticals.
It is FREE for existing Phocuswright Open Access and Innovation subscribers (learn about how to become one here). For non-subscribers, it is available for purchase for $495.
For Phocuswright subscribers who are interested in digging further into the data behind the report, The State of Travel Startups 2018 Database is also available for download.