Travel, tourism and hospitality has a history of attracting entrepreneurs inspired by the vertical’s complexities and eager to bring innovation to the world’s largest industry. While established travel companies are continually developing new products and services, startups are often the first to leverage emerging technologies, challenge conventional business models and drive change.
Established in 2008, The Travel Innovation Summit@The Phocuswright Conference is the industry’s premier showcase for innovative travel technologies and applications. Since its inception, The Travel Innovation Summit has featured 126 travel startups, which have in total raised nearly US$700 million. Phocuswright closely follows travel startup and investment developments worldwide, publishing the results in its "State of Startups" spotlight, now in its third edition.
This analysis tracks the global travel startup landscape from 2005 to 2013, examining more than 700 startups founded during this period. The article breaks out startup developments and funding by region, with detailed analysis by both vertical (i.e., travel segment) and horizontal (i.e., technology, medium or business focus).
- Key Findings
- Areas of Analysis
- The State of Startups: Number of Companies and Funding
- Regional Analysis: Asia Rising
- The Exit
- Startups by Vertical: Lodging, Air and Ground Transport Dominate
- Startups by Horizontal: Technology and Commercial Innovation Reign
- Investor Roundup: Follow the Money
Phocuswright created a database of more than 700 online travel and technology companies founded since 2005 to track the volume of startups and investment, and assess commercial and technological areas of focus. A complete list of the startups studied, including funding and descriptive information, is available in the Appendix.
To qualify for the analysis, each company was required to meet the
1) Travel focus: The company must have a clear commercial focus on online travel or travel technology.
2) Founding year (2005 or later): Companies had to be founded in or after 2005. Note that a handful of exceptions were made for companies that were founded earlier, but that either received significant rounds of funding or where acquired from 2005-2013.
3) Technology, commercial or segment innovation: Startups had to demonstrate some degree of innovation, whether in technology, commercial model, or application of existing technology/models to a new area of the travel industry (e.g., bringing online booking to vacation rentals).
4) Business activity: Companies had to demonstrate business activity; startups in stealth mode or still in private beta were generally not included unless significant funding rounds could be verified.
The information in this spotlight is based on company filings and
statements, interviews with company executives, and data from third
parties such as AngelList, CrunchBase, Skift, Tnooz TLabs and venture capital publications. Financial information has been included wherever possible, including angel and venture rounds, private equity and industry acquisitions. The analysis excludes public offerings and acquisitions of public companies. All funding rounds are represented in U.S. dollars.