TLDR:
- Venture capital investment in the travel industry has decreased substantially in recent years.
- Only $2.9 billion of venture capital investment was registered in the travel industry last year, the lowest level in a decade.
In a recent episode of the Skift Travel Podcast, Head of Research Seth Borko discussed the significant decline in venture capital funding in the travel industry. The industry saw a decade low in 2023, with only $2.9 billion invested, a significant drop from $9 billion in 2019.
Pranavi Agarwal’s research utilized a large, proprietary database from Crunchbase to analyze travel-related companies by sector and region, revealing key trends and including over 20 charts for in-depth analysis. Macro-economic factors such as high interest rates, inflation, and volatile valuation levels have contributed to the decline in venture capital investment not just in the travel industry but the broader market as well.
There has been a shift towards late-stage funding for more mature companies in recent years. Funding for early-stage startups decreased in 2023, while series F funding for mature companies saw significant investment. The surge in early-stage funding during the pandemic led to many startups raising large amounts of money, some without solid business models. As these companies struggled post-pandemic, VCs became more cautious and preferred to invest in safer, more mature companies.
Despite the current challenges, both Pranavi and Justin Dawes express cautious optimism for future funding as economic conditions stabilize. The overall trend in venture capital investment in the travel industry highlights the need for companies to adapt their strategies to attract funding and weather market fluctuations.
