Where are they now? Catching up with the Hot 25 Travel Startups for 2020

It’s been almost five years since PhocusWire named its Hot 25 Travel Startups for 2020. Since that time the industry has experienced a jump in AI technology and many mergers and acquisitions in travel around the world, which leaves these companies excited for the opportunities ahead and some even concerned.

Let's not forget that these are businesses that we identified in November 2019 as poised to grow in 2020 - completely unaware at the time that the COVID pandemic would bring travel to a standstill three months later. So it's noteworthy that they not only managed to survive through that difficult period, but they emerged and have continued to grow.

Our class of 2020 has undergone developments such as name changes including Allfly, which was previously called Bacarai and Mize, previously Hotelmize, to better reflect the development of their businesses.

Others have continued on their original paths. We checked in with a selection of those, including Magpie, Questo and Futurestay. Responses have been edited for brevity.

AllFly

Allfly, previously Bacarai, is a travel management company (TMC) dedicated to simplifying and optimizing the travel experience for companies, schools and meeting planners. 

Co-founder and COO Kenny Totten:

The biggest challenge I’m dealing with today is… undoubtedly product and technical related. The ever-changing landscape of airline distribution puts a high cost burden on all travel companies, but young ones like AllFly feel it more so. With the rise of NDC, One Order and airlines pulling out of GDS agreements, it is a challenge to have all the content and features that customers have come to expect as table stakes.

My view on the current funding environment for travel startups… to date, we have raised $6.7m over two rounds. The current funding environment is tough, and if you don't have significant growth or traction, fundraising is going to be an uphill climb. 

There has been increased M&A activity in travel. My approach to evaluating such an opportunity – on the buy or sell side – would be… we have definitely seen an increase in interest from P&E firms and travel buyers. We've been approached more than 15 times in the last six months alone. At our size, it's still too early to consider any offers.

The technologies or innovations that excite me most are… because… this sounds like a cliche, but AI and building our own large language models (LLM) is the thing that most excites us. I believe that AI will change how support happens in travel. We are likely years away from an AI agent being able to replace a human travel agent, especially for changes, travel disruptions, and cancellations. The days of travelers waiting on hold to speak to an agent at the airline are numbered. Internally, we have recently deployed an AI chatbot on our booking platform, Quest. Alice (as we named her) has been performing wonderfully, closing out over 90% of non-action oriented inquiries. 

Mize

Mize, previously named Hotelmize, is an AI-driven, data powered and fully automated hotel booking optimization solution that strives to maximize client potential by enhancing their purchasing capabilities and standardizing their data across supply and sales channels.

Founder and CEO Dor Krubiner:

The biggest challenge I’m dealing with today is… growing our company in the right way from an organizational perspective. As we've expanded our range of offerings to the market, we're now focused on creating a structure that will effectively support the growth it creates and will allow us to scale these products.

My view on the current funding environment for travel startups… is it places a strong emphasis on having a solid business model and prioritizing profitability over rapid, unprofitable growth. While investors recognize the potential of the industry, they are now more selective than ever about where they choose to invest.

There has been increased M&A activity in travel. My approach to evaluating such an opportunity – on the buy or sell side – would be… to focus on product and partner-based synergies. At Mize, we believe that the ability to deliver multiple solutions to our partners is crucial for driving mutual success, enabling us to create greater value for all stakeholders.

The technologies or innovations that excite me most are… advancements in AI infrastructure and the supporting tools that enable us to deploy sophisticated AI models capable of predicting future behaviors in real time. This significantly reduces time and costs, accelerating the pace at which new ideas can be brought to market.

Magpie

Magpie is a content channel management platform for the tour and activity industry that enables suppliers to upload and manage their content while distributors ensure their listings are up to date.

CEO Christian Watts:

The biggest challenge I’m dealing with today is… in this world of Generative AI, so many things are now possible - which opens up opportunities in multiple directions. Working out exactly what to build has ironically become much more difficult. Clearly this is both a challenge and an opportunity. 

My view on the current funding environment for travel startups… we’re not currently fundraising. What I hear from others is that fundable startups right now need to lean heavily on the latest in AI. There is a lot of uncertainty right now with AI technology, so demonstrating a sustainable moat is critical.

There has been increased M&A activity in travel. My approach to evaluating such an opportunity – on the buy or sell side – would be… everything is for sale. I think that's almost always the case. For me personally, I'd only be really interested in something that would lead to really fast implementation of the latest in AI technology. 

The technologies or innovations that excite me most are… because… It's AI because there has never been a technology even close to the potential impact of the current LLMs. For me, it's about making disruptive changes to benefit the industry.

Futurestay

Futurestay is a short-term rental management software that helps hosts make more money with their home.

Founder S. Philip Kennard:

The biggest challenge I’m dealing with today is that… serving the long tail of the market is hard. The one size fits all approach the rest of the short-term rental (STR) technology industry has taken simply doesn’t work for the independent segment. We’re helping everyday people succeed and that means being flexible to a number of different personas, needs, motivations and challenges. The reason why no one has won in this segment is because it's hard to do just that. The product has to do more than just work, it must deliver the experience and outcome that the customer needs. A big part of that success is the human service that accompanies the technology.  

Not incidentally, this segment is the one that’s going to win the STR industry in the long term. The number of individual hosts has grown 75% since COVID. SPAC-backed enterprise operators and the master lease model have largely flamed out, with multiple bold-name, billion-dollar company delistings and bankruptcies over the past 24 months. For better or worse, the $200B+ STR industry is and will always be about everyday people and their homes, and whichever company figures out how to best help them succeed in STR, will win. 

My view on the current funding environment for travel startups is that… teams solving real problems in innovative ways will get funding…everyone else might face some challenges. Q3’s reinvigorated and renewed investor focus on post seed platforms targeting individual STR owners and operators, reflects the reality that solving the hosting journey remains a blue ocean opportunity, one beyond the reach of well-funded incumbents focused on the comparatively small, but mature, enterprise segment.

There has been increased M&A activity in travel. My approach to evaluating such an opportunity – on the buy or sell side – would be… if it's part of our core strategy, 1 + 1 = 3 or more or, it aligns with our vision, then we’re interested. Beyond that, every opportunity is unique and we’d evaluate accordingly.

The technologies or innovations that excite me most are… the ones we’re working on, because they will change this industry forever and for the better. Stay tuned.

Questo

Questo is a city exploration platform that enables tourists and locals to discover a city by offering gamified social experiences in the real world.

CEO and founder Alex Govoreanu:

The biggest challenge I’m dealing with today is… I think that for most consumer startups, distribution is the main challenge always, and that's the case for us as well. 

My view on the current funding environment for travel startups… I don't think that travel startups were very popular in the past years, with some outliers here and there. But in today's world, this is even worse given that AI is taking most of the hype. That being said, if you build a great business, then you will do fine anyway, and that should always be the main focus.

There has been increased M&A activity in travel. My approach to evaluating such an opportunity – on the buy or sell side – would be… we have a vision to execute on, but we're always open to partner with companies that have synergies with Questo.

The technologies or innovations that excite me most are… because… definitely AI. We have used it for a couple of years, and it has been a game changer in game creation, but we feel like what we've done is nothing compared to what we will do over the next 6-12 months. All I can say is that the world can really become a playground, thanks to AI.