Travel startup funding and M&A activity in Q1 2025

While 2024 suggested a positive shift in funding for travel startups compared to the prior year, things cooled off in the first quarter of 2025.

“[This year] is off to a slower start than any other year so far, with under $1 billion raised as we close in on the end of the quarter. This compares to $1.6 billion last year and $1.2 billion in 2023 at the close of Q1,” said Mike Coletta, senior manager of research and innovation at Phocuswright.

According to Coletta, typically, the bulk of funding goes to a small number of companies via Series A through E and private equity rounds—and this rings true for the start of 2025. However, “Series A funding is trailing further than usual so far.”

A significant round of funding went to corporate travel this quarter, specifically to business travel management platform TravelPerk, which secured $200 million in Series E funding in January. At the time of the announcement, the company also confirmed the acquisition of expense management technology company Yokoy for an undisclosed amount.

Corporate events specialist Naboo also raised €20 million in a Series A round  during the first quarter of 2025.

Tours and experiences were of particular interest for investors during Q1 with Exoticca, a platform for multi-day tours, raising €25 million to improve its artificial intelligence-powered technology, and experiences platform Klook securing $100 million in February to extend its reach across Asia Pacific and attract younger travelers. Meanwhile, this month, Spain-based campsite and experiences provider HolaCamp raised €10 million to bolster operations.

In terms of hotel technology, Mews raised $75 million in March to expand in the United States as well as in Germany, Austria and Switzerland. Revenue management systems provider RoomPriceGenie—a PhocusWire Hot 25 Travel Startup for 2022—also raised $75 million this quarter to fund its global expansion.

Additionally, Kenya-based startup Purple Elephant Ventures raised $4.5 million in seed funding to advance its mission to bolster Africa’s tourism. Superlogic, a specialist in helping brands with engagement and loyalty, raised $13.7 million in Series A funding to “meet the market demand” and expand its customer base. 

When looking at the remainder of 2025, Coletta said there are “mixed signals.”

“Startups of the future could be run far leaner, requiring fewer technology resources as well as employees in many different functions. Thus, they could require less capital going forward,” Coletta wrote in a December 2024 Phocuswright report titled The Impact of GenAI on Travel Startups.

On the other hand, however, Coletta said generative AI makes it “easier to create software and start a company than ever.”

“This may create increased competition in the marketplace, for which more money will be needed for marketing and branding to cut through the noise, and this could offset diminished need for technology funds. Furthermore, most technology revolutions like we are now going through with generative AI typically spur an investment cycle,” he said.

“Additionally, many of investors who typically invest in travel raised new funds last year, and we expect those to be deployed soon.”

M&A trends

Mergers and acquisitions (M&A) also defined the first quarter of 2025, specifically within the payments and expense technology space.

Most technology revolutions like we are now going through with generative AI typically spur an investment cycle.

Mike Coletta, Phocuswright

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Perhaps the most significant announcement came from American Express, which plans to acquire Center, a payment and expense technology provider.

While the financial terms weren’t disclosed, the merger “will aim to create a seamless expense management platform” by combining Center’s software and Amex’s corporate and small business cards. Announced in early March, American Express said the acquisition is expected to close within the second quarter of this year.

Payments specialist Flywire Corporation also moved to acquire Sertifi, a payments and workflow digitization platform for the hospitality sector, for a total of $330 million.

Currently, Morgann Lesné, travel lead and partner at Cambon Partners, said M&A activity appears less active in business-to-business (B2B) and business-to-consumer (B2C) “but super active in software.”

Notable software deals in Q1 included DerbySoft’s acquisition of AI-powered platform Arise in February and Mews’ acquisition of property and event management specialist Clarity Hospitality Software Solutions in January.

Other B2B acquisitions in the period included Juniper Group’s acquisition of retailing specialist InteRES in January and TravelPerk’s aforementioned acquisition of Yokoy as part of its Series E expansion.

For Matt Zito, an investor and broker for travel M&A, there hasn't been notable shifts in the types of companies being acquired from his “active buy-side clients,” who are instead looking at a “broad spectrum of travel companies,” including travel management companies, tour operators, online travel agencies, destination management companies and various B2B travel and hospitality models.

While Lesné observed less activity in both B2B and B2C, Zito said there is “still interest” in these areas, as well as “action in both leisure travel and business travel.”

On the consumer front, in March, Mindtrip, an AI-powered trip planner and one of PhocusWire’s Hot 25 Travel Startups for 2025, acquired Thatch, a platform that offers guides from travel content creators and local experts. And in Europe, travel conglomerate Dertour Group acquired Hotelplan Group from Migros. A month prior, global vacation rentals marketplace HomeToGo acquired Interhome, which is a subsidiary of the Hotelplan Group.

February also saw the acquisition of RightRez, a specialist in air travel technology, by travel technology provider Mize. And earlier this month, Vacasa accepted a revised proposal from Casago to purchase the company for $5.30 a share—an increase from $5.02 a share initially offered in December last year.

M&A activity predictions

In 2025, Zito said activity is “still outpacing 2024.”

“There is a lot of interest from both buyers and sellers. Valuations have stayed fairly realistic, although I am starting to see a little uptick from sellers wanting higher valuations.”

For his part, Lesné said that valuations are “more realistic” in both B2C and B2B compared to software as a service (SaaS) companies where expected ongoing growth and profitability can inflate valuations to 10 times their recurring revenue.

Unlike the current standings with startup funding, experts are optimistic about M&A activity for the remainder of 2025.In fact, Zito predicted that transactions will double, driven by three main factors."

First, aging owners in their sixties and seventies are ready to sell, he said.

In addition, “Business climate is perfect—public stock markets are at all-time highs, although it looks like a small correction is underway. Travel companies’ revenue have hit 2019 numbers pre-COVID and are now more profitable.”

Lastly, Zito said that buyers are seeking technology that they can “acquire and maintain competitiveness.”

Echoing this, Lesné said Cambon Partners currently has 15 ongoing transactions, which is the company’s “biggest pipeline ever in value and volume.” He also predicts an active M&A market, specifically in the software space, where a number of transactions are already underway or being prepared.

Zito and Cambon Partners' Min Liu spoke to PhocusWire senior reporter Morgan Hines at The Phocuswright Conference last November. Watch the full discussion below.