Tracking Q3 travel startup funding

The third quarter of 2025 felt much like the second quarter when it came to travel startup funding. There were few rounds and those that were announced were at the pre-seed and seed stages for the most part, peppered with a handful of larger rounds here and there.

The conflict in the Middle East continued to create general uncertainty in global markets alongside uneasiness around tariffs. The ongoing rapid artificial intelligence (AI) developments from the large language model platforms has also contributed driving investors to commit funds to more startups, albeit with smaller check sizes.

In a recent interview with PhocusWire, Thayer Investment Partner’s Chris Hemmeter said the company is about to start investing from its fifth fund and anticipates 40 to 50 portfolio companies for the fund, a leap from previous funds.

So who got funding?

Sometimes there are discernible trends around pockets of the travel industry that are attracting funding such as B2B hospitality tech, mobility or corporate travel. This was not the case in Q3 with the travel startups attracting pre-seed or seed rounds varying from AI trip planners such Holiwise ($1.5 million) and baggage operating systems AllTheWay (€3.5 million) to Dubai-based alternative accommodation brand Seraya ($1.8 million) and payments company Turnstay ($2 million).

Hospitality loyalty startup Journey, which announced $7.7 million in seed funding, is also worth a mention. The amount is relatively large for a seed round in the current climate, which perhaps speaks to a shift in how consumers not only perceive loyalty schemes but also how they want to redeem rewards.

Larger checks in the quarter did not follow a trend either. WeTravel ($92M) and Fetcherr ($42M) both landed Series C rounds. Investors clearly see the growth potential in the segments the companies operate in, automation of multi-day tours and AI pricing tech for airlines and perhaps beyond, respectively.

Blockskye, a corporate travel management platform, also announced Series C funding with investors including Blockchange and United Airlines Ventures (UAV) making up the $15.8 million round. 

The company, a PhocusWire Hot 25 Travel Startup for 2024, said the investment would go towards payment products and global expansion.

There were also significant sums on either side of Series C for companies predominantly in the vacation rental space including B2C platform Gathern ($72 million in Series B) and property management company Kasa ($40 million in Series D).

In addition, luxury rentals platform Elivaas secured $10.4 million in Series B and UnderTheDoormat announced a $7 million.

And there were several very large investments in the quarter including $500 million in Series E-2 for corporate expense management and payments specialist Ramp which the company said will go towards picking “up the pace” of its AI developments. Meanwhile, eSIM provider Airalo landed $220 million which will go towards new product development and improving the customer experience.

With traditional venture capital harder to come by, some travel startups looked to corporate venturing for investment. Alongside its investment in Blockskye, UAV also invested to acquire a stake in loyalty and media technology specialist Dfinitiv and aiOla, a specialist in voice and conversational AI.

The latter investment is particularly interesting in light of recent comments from OpenAI’s chairman Bret Taylor that voice could become even more important than text in the long run.

Acquisition tracker

Did the big get bigger in the quarter? Not necessarily. The merger and acquisition (M&A) activity that took place in the past three months seemed to be more about integrating additional services for the most part. Mews’ acquisition of Flexkeeping, housekeeping automation tech earlier this week is a good example as is passenger communications specialist 15Below’s acquisition of Airport AI.

India-based TBO, meanwhile, did add to its growing portfolio with the acquisition of luxury travel specialist Classic Vacations for $125 million.

There was further business travel consolidation in recent months with Direct Travel acquiring long-term strategic partner ATPI while Trip.com Group’s Trip.Biz acquired Key Travel’s European business. And Webjet Group acquired corporate travel tech company Locomote as part of a strategy to build up a business travel offering.

A final thought

Travel startups could be forgiven for wondering whether the funding situation might improve with only three months remaining in the year. Investors are not optimistic. In the recent PhocusWire interview Thayer’s Hemmeter said that ever since rates began to rise “the mantra has been capital efficiency, protect your balance sheet, push off financing as long as you can, focus on unit economics.”

Watch the full interview with Hemmeter below where he discusses how the company decides on its investments, the idea of SPACs (special purpose acquisition companies) as a “door number two” and his “could have been” investments.