The travel unicorn landscape has been turned on its head in the past 18 months by the pandemic as well as the rise of public listings via special purpose acquisition companies (SPAC).
Travel and Mobility Tech (TNMT), which tracks companies in the space, recently revealed the growth of unicorns in travel from 22 in 2018 to 45 at the end of 2019 and 49 at the end of 2020.
The total is only 36 now.
While TNMT, the insight arm of Lufthansa Innovation Hub, had notables such as Airbnb, Gojek, Didi and Yanolja on the unicorn list two years ago, these companies have now gone public.
Others, a total of eight including Sonder, Grab, Traveloka and Tiket, have exited via SPAC.
Unicorn to SPAC
In late April, Sonder announced its plan to public by merging with SPAC company Gores Metropoulos II for a combined valuation of $2.2 billion.
Earlier in the month, Grab filed for its IPO via a SPAC with Altimeter.
Grab said it hoped to raise $4.5 billion as a result of the listing.
Meanwhile, Traveloka has said the company and the market are ready for its IPO and that going public via a SPAC could be attractive.
And various reports reveal Tiket is in discussions with SPAC Cova Acquisition to take it public.
Back in April Goldman Sachs said SPACs could account for about a trillion dollars in deals in the next two years and estimated around $129 billion of SPAC capital was seeking out targets.
This is a significant increase on the $300 billion the company said SPACs might drive in merger and acquisition activity back in December 2020.
Analysts at the investment bank also said at the time that the SPAC frenzy was slowing amid closer scrutiny from regulatory authorities.
It’s unclear how that may affect travel but TNMT believes no other sector has seen “so many companies jumping on the SPAC bandwagon this year.”
Both Tiket and Traveloka for example have said they are also considering other routes to market.
And it’s not just travel unicorns that have taken advantage SPACs to go public.
Earlier this month, exclusive travel club service Inspirato announced it would go public by merging with Thayer Ventures to create a SPAC.
Thayer was an early mover in the travel SPAC space when it announced the creation of an offshoot, Thayer Ventures Acquisition, in October 2020 with a plan to raise $175 million.
Waiting in the wings
Others travel SPACs are waiting to pounce.
Altitude Acquisition II, led by Gary Teplis, the chief executive of travel management company Teplis Travel, launched its bid to raise $200 million via the public markets in February.
Altitude Acquisition, the first SPAC from Teplis and his team, raised $261 in December 2020.
Teplis has said the targets are travel-related and travel technology businesses.
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Also waiting in the wings are Moose Pond, which is led, by among others, HomeAway founder Brian Sharples and filed with the Stock Exchange Commission in March hoping to raise $200 million.
Go Acquisition Corp, led by Greg O’Hara, executive chairman of American Express Global Business Travel, announced it was targeting travel-related and travel-adjacent businesses last year.
The SPAC announced its $500 million IPO in last August.
Most recently, French hotel giant Accor said it would be targeting “activities adjacent to its core hotel business” including travel technology, wellness and events, as it raised €300 million via Accor Acquisition Company on Euronext Paris.
At the time, Sebastien Bazin, chairman and chief executive of Accor, said: “This new vehicle will enable us to continue to expand the Accor ecosystem beyond the hotel room. The AAC teams will now devote their energy and talent to identifying and partnering with recognized companies which will benefit from Accor's size, network and influence. These products, services and brands will also be highly attractive to our hotels’ owners and guests.”
Predictions about anything related to travel currently are hard because government restrictions across the globe continue to blight the sector’s recovery.
In addition, after an SEC statement in April this year about new accounting rules for SPACs, activity decreased across the board.
CB Insights says filings went from 298 in the first quarter of 2021 to 61 in Q2 with funds raised dropping from $83 billion to $12 billion.
However, a rough calculation of the above companies reveals around $1.5 billion targeting the sector.
Similar to Grab, mobility companies continue to be likely targets as they continue to shake up ground transport, bring on additional services and develop their super app status.
Alternative accommodation providers could also be SPAC merger candidates.
And, the continued faith in corporate travel startups such as TripActions and TravelPerk from investors, could make them attractive SPAC targets.