Travel Tech Hits Inflection Point | Investment For Travel Tech Tanked in 2020

By Becca Szkutak

With reporting from Alex Konrad and Kenrick Cai

Howdy! Welcome to Midas Touch. I’m Becca Szkutak and I’m joined by senior editor Alex Konrad and senior reporter Kenrick Cai.

The team at Midas Touch would like to wish all of our readers and their families a happy Thanksgiving. If you are reading this in the U.S., hopefully you are still recovering from a fun day of food shared with important people. With Thanksgiving being one of the busiest time periods for travel, we decided it was time to check in with the travel tech sector. This edition looks at the state of the venture-backed hospitality tech market, how it has fared through this pandemic and where it’s poised to head from here. We also dive deeper into the numbers and investment volume. We’ve kept this edition short so you can spend more time with your family. We’ll be back to our regularly scheduled program next week. Let’s dive in.

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November 27, 2021

Elevator Pitch



	Despite a tough year in 2020, travel tech has more than recovered this year. Getty.

In April 2020, 3.9 million people, about half the world’s population, were on lockdown as governments in more than 90 countries asked citizens to stay home to avoid the spread of Covid-19. Things looked grim for the travel industry. As businesses wavered across the sector, nascent startups in the travel tech business seemed especially at risk. Travel photo-sharing platform Trover, launched in 2011 and acquired by Expedia in 2016, went under. Peek, a booking site and marketplace for experiences, saw its volume drop to literal zero. Airbnb was raising money to keep the lights on even as it readied for IPO. Now, less than two years and several vaccines later, travel tech is, again, readying for takeoff.

While some companies will never recover, potential category winners did, which industry insiders say indicates more of a correction than a crisis. Many companies actually thrived, recording growth metrics and profit. What’s more, venture capitalists weren’t deterred from the fresh potential for risk, which inspired more to enter the travel tech sector over the last two years, and caused those already active to champion the bulls. “Our general belief has been that travel tech has been in a renaissance for at least the last 5 years,” Gaurav Tuli, a partner at F-Prime Capital, tells Midas Touch.

By the numbers: Travel tech has garnered $8.7 billion in investment volume this year. With just a month to go, the sector may need a record number of consumers re-embracing holiday travel to top 2019’s $11.1 billion record. But it's already surpassed the totals from 2017 ($5.4 billion) and 2020 ($6.1 billion). “Once people's confidence returned and they realized that not everything is going to hell — that was probably Q3 of 2020 — we saw a lot more interest in investing in travel tech,” Tuli says. “It helped that we had been active prior to the pandemic. We started to see a lot of strength in the numbers and performance...

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Up And To The Right


	While 2020 didn’t kill the travel tech startup market — as you saw above in elevator pitch — venture capital did dry up along with travelers in the first few months of the pandemic. Last year saw $6.1 billion of capital invested globally across 724 deals, with $1 billion of that total — a whopping 16% — going to a struggling Airbnb in April, just months prior to its December IPO. That’s nearly half the funding travel tech received in 2019, which saw $11.1 billion invested across 1,164 rounds, according to data from Crunchbase. The later half of 2020 took the biggest hit, with Q3 and Q4 totals dropping below $1 billion. For an ailing travel tech industry, vaccines were just what the doctor ordered. Cabin-sick consumers were more than ready to go someplace — any place — that wasn’t home. Newly IPO’d Airbnb saw its public stock gaining ground and for those travel companies still in startup mode, cash infusions seem to be making a comeback. As 2021 rounds its final lap, it’s seen $8.7 billion invested through 560 rounds to date, surpassing 2020 by 29% as well as 2017’s full-year numbers. And that investment total is from less rounds (compared to previous years) which means the market is starting to mature.... You're seeing this message because your free trial of this newsletter has expired. To read the rest of this story and more original reporting, data and analysis, please subscribe.

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