Ground Transportation Captures Record Share of Travel Startup Funding

Investors have poured more than US$12 billion into travel startups founded over the past decade – and more than half of that funding was raised in 2014 alone. According to Phocuswright's Travel Innovation: The State of Startups 2005-2014, which tracks nearly 1,000 travel companies launched worldwide from 2005-2014, massive bets on ground transportation and private accommodation innovators drove a record $6.4 billion in travel startup investment in 2014.  

Following a broader trend among venture capitalists and other investors, the size of individual funding rounds for travel startups has ballooned in recent years. Uber tops them all with last year's $2.4 billion round, but a growing number of travel companies have attracted investments into the hundreds of millions.  

"Despite the higher investment ceiling, the lion's share of capital is flowing to a relatively small group of companies, primarily in the ground transportation and private accommodations segments," says Phocuswright’s senior research analyst, Cathy Schetzina Walsh. "Among these are Uber, Didi Dache-Kuaidi Dache, Airbnb, Lyft, GrabTaxi, and Ola Cabs – each with a valuation of $1 billion or higher.”"

Led by the U.S., North America and Asia Pacific have captured a disproportionate share of investor attention. The two regions combined are home to 67% of startups, but receive 81% of funding.  

Phocuswright's Travel Innovation: The State of Startups 2005 – 2014 provides a thorough analysis of 993 digital travel startups featuring technology, commercial or segment innovation, including information on funding, vertical/horizontal trends, and regional analysis.