In April 2020, when the travel industry was hitting rock bottom and travel companies were spiraling down, Airbnb founder Bryan Chesky said: “Anybody betting against travel will be on the wrong side of history in the long run". I think that he’s been proven right not only because we've seen record highs in travel startup investments and in public companies share prices, but because we all know that travel is intrinsic to the human condition. Travel might be paused but never stopped. This post is about some of the startups and investors who decided that now is a great time to rethink the future of travel.
2021 has been an active year in travel startup investing. In the Travel Tech Essentialist newsletters this year, I’ve reported 100 fundraising rounds for a total of $6.5 billion. The average round has been $6.5 million and median $10 million. This post gives an X-ray of these 100 rounds.
1. Startup headquarters
Startups from the United States account for 29 of the 100 rounds since January 2021. Germany and England follow with 10, and then Spain with 7.
Europe was very well represented in the top cities with most travel startup funding so far in 2021. London occupies the top spot, with only one American city (San Francisco) in the top 6. This is different than in the 2018 - 2020 time frame, in which three US cities - San Francisco, New York and Los Angeles - were in the top 6.
A total of 443 investors have participated in rounds going to these 100 startups in 2021. SoftBank has been the most active VC in this space so far this year. There are 4 non-US investors in the top 7 most active in 2021, in contrast with only 2 non-US investors in the top 8 in 2018-2020 (see next section).
Here are the most active Venture Capital firms in 2021, and in parenthesis I am also including the number of travel and transportation startups they’ve invested since the beginning of the pandemic in April 2020 . In the last column, I also am including the total amount raised by each of the startups to date in all of its rounds (various investors are involved, not only the VC highlighted).
If we expand the scope to include investments since April 2020, there are 810 investors who have participated in rounds going to 280 travel and transportation startups. The most active investors who have bet on the travel space in the midst of its worse crisis in history include, in addition to the ones on the table above, 500 Startups (9 startups), Intelak Hub (7), Crowdcube (6), Spark Capital (5), Techstars (5), Andreessen Horowitz (4), Accel (3), Atomico (3), JetBlue Technology Ventures (3), Plug and Play (3), among many others. I am convinced that these investors will be financially rewarded by daring to invest when many didn’t.
With 24 startups, B2B is the largest category, with 24 startups and an average financing round in 2021 of $11 million, and a median round of $5 million. The next largest macro category is Transportation with 23 startups and an average round of $99 million and a median of $15 million. The OTA macro category saw the largest round of any: Yanolja’s Series D of $1700 million.
There are 121 micro categories associated to the 100 startups with 2021 funding. The top 4 micro categories:
Ground transportation ⟶ 20% of startups
Hospitality ⟶ 15% of startups
Business & Corporate travel ⟶ 9% of startups
Online Travel Agencies ⟶ 8% of startups
Travel leaders born in the previous crisis include Airbnb, GetYourGuide, Vacasa, SilverRail and Adara. Some of the future leading travel companies will be pandemic native startups. Many of the brave entrepreneurs who launched their startups in the middle of the worse crisis in the sector’s history and the investors who decided to support them will certainly be rewarded.