The state of travel funding appears bleak right now, according to recent data from Phocuswright.
“[This year] is off to a slower start than any other year so far in terms of dollars raised, while deal count is also down a lot from the past decade,” said Mike Coletta, senior manager of research and innovation for Phocuswright.
Travel funding is at 10-year low after spiking in 2021 and 2022, but midway through 2025, things are still in flux.
“As of now, this year, it's on par with last year, maybe 250 rounds we'll see this year,” Coletta said while leading a panel discussion at Phocuswright Europe, then asking investors about their take on the current landscape and what it may look like in the near future.
“What we see here is actually very, very strong deal flow on startups coming in, with new ideas powered by AI,” said Suzanna Chiu, head of Amadeus Ventures. “Arguably, at the moment, everything that we see is AI.”
Chiu isn’t convinced all funding rounds are being reflected in the current data, either, and we could see a “pickup” later in the year.
Toni Raurich-Marcet, general partner for venture capital firm Traveltech 2, added that what’s happening now makes “a lot of sense,” citing 2021 and 2022.
“For me, they were the worst because the rationality of the numbers behind it were not justified by the fundamentals behind it,” Raurich-Marcet said.
“In the industry of VC, a lot of times, what we see is that the best vintage—meaning the years where you invest—tend to be the ones where the valuations are [low]. Over the five or 10 years span, those are the ones that have the higher return because the return typically is not on the valuation of the companies, but on how much you put in, how much you take out. This return on capital is what should matter.”
Valuations have now corrected after a period of inflation during 2021 and 2022, he said.
In the B2C market, there is still a lot of uncertainty, said Christoph Schuh, partner at Lakestar.
“On the B2B side, in my view, it's less of a valuation topic,” Schuh said. “It's industry agnostic tools, which are used for travel but not shown in your statistics as a travel tech investment.”
In the wide-ranging conversation, Coletta, Chiu, Raurich-Marcet and Schuh also touched on the effects of AI on the market, funding for travel startups and more.
Watch the discussion below:
Executive Panel: The Investor View