Mobile Ride-Hailing Apps Receive Majority of Total Travel Startup Funding

Startup activity in travel accelerated following the global recession, with over 200 digital travel companies founded each year from 2011-2013. From 2005 to the first quarter of 2016, 1,252 digital travel startups attracted US$32.6 billion in funding – and mobile ride-hailing apps received the most. A new Phocuswright report, The State of Startups 2016, tracks global travel startups and investments. The report breaks out developments and funding by region, with detailed analysis by segment.

Investment in travel startups has skyrocketed over the past few years – but much of the funding is concentrated across a small group of companies in a handful of categories. From 2005-1Q16, the 10 most-funded companies received 68% of total dollars, and mobile ride-hailing startups accounted for more than half of the total.

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"Nine out of the 10 most-funded travel companies are concentrated in ground transportation and private accommodations," says Phocuswright's senior research analyst, Cathy Walsh. "But the success of top funding recipients, including Uber and Airbnb, has also fueled competitors across regions and inspired new startup ecosystems supporting these and other marketplaces."

Even excluding the largest funding rounds, investment in travel startups has continued to grow. Among horizontal-focused companies, nearly 70% of funding went to startups that include booking as a core focus.

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Purchase Phocuswright's The State of Startups 2016 for detailed analysis into the startup and investment activity.