Travel startup funding and M&A tendencies in Q2 2025

If the primary quarter of 2025 proved lackluster for journey startup funding with solely about $1 billion going into newcomers within the area, the second quarter slipped additional.

It appears all of the headlines round tariffs in addition to the political uncertainty and international battle could have put investments on maintain, with solely about $800 million going into journey startups, based on Phocuswright’s Travel Startups Interactive Database.

If funding ranges proceed alongside this development, the full come finish of 2025 may very well be round $4 billion, considerably lower than 2024’s $5.5 billion and a far cry from 2021’s document $16 billion.

Travel expertise corporations that did announce important rounds within the quarter included Ramp with $200 million, Canary Technologies with $80 million, $60 million for Fora, a PhocusWire Hot 25 Startup for 2023, and €46 million for Holidu. Onfly, a PhocusWire Hot 25 Startup for 2022, additionally bucked the development when it introduced $40 million in mid-April.

Most different rounds had been beneath the $10 million mark, excluding Tern, the journey adviser platform, which secured $13 million in Series A funding in May. Others that managed to unlock funding within the quarter included journey eSIM supplier Kolet, which landed $10 million in a Series A spherical, Chatlyn, which introduced €8 million and Unravel, which secured $7 million in Series A funding.

About two-thirds of journey entrepreneurs have acknowledged that the funding local weather is both very tough or considerably tough, based on preliminary findings from a global survey shared at Phocuswright Europe final month.

A look again on the second quarter of 2024 reveals there have been extra headline grabbers, together with Guesty and Fetcherr, for instance, touchdown bigger rounds than there have been extra lately. That may very well be all the way down to components together with international financial instability in addition to uncertainly round what’s actual relating to synthetic intelligence (AI). 

The capability of journey startups to spin up one thing extra quickly utilizing AI and AI-driven instruments is prone to be making traders suppose twice about who they’re prepared to spend money on and the way a lot they need to commit.

Marc Andreessen, normal accomplice of Andreessen Horowitz, launched some career advice for these dwelling within the quickly evolving AI period, lately saying, “Series C to E companies are the current sweet spot: enough traction, still lots of upside.”

Enough mentioned? It doesn’t imply journey startups can not entice pre-seed and seed rounds, however they’re few and much between. Juno with $2 million, Travaras with $1.4 million and Airial Travel’s $3 million are three which have managed to draw funding in latest months.

Broadly talking, the highest journey tech traders appear upbeat concerning the subsequent few years for startup funding.

“I’m optimistic, especially at growth and later stages, but that capital will flow earlier over time. The market has matured. Capital is more travel-literate. Scale outcomes are now real. The path from idea to IPO is clearer, and travel tech has evolved from niche to full-blown category,” mentioned Gaurav Tuli, accomplice at F-Prime Capital in PhocusWire’s latest prime traders in journey tech in 2025 article.

M&A exercise

Lack of funding can drive startups to hunt an exit by way of mergers and acquisitions (M&A), however there doesn’t appear to have been a flurry of exercise on this space in Q2.

However, Kinnevik, a enterprise capital firm which has invested in TravelPerk and Mews, reported “encouraging” signs of increased M&A activity and potential public listings typically in its Q2 earnings in early July.

Notable acquisitions within the quarter included Marriott’s deal to purchase CitizenM for $355 million and Sabre’s deal to dump its hospitality enterprise unit to asset administration firm TPG for $1.1 billion.

JetBlue Airways promoting JetBlue Ventures to aviation funding agency SKY Leasing for an undisclosed sum additionally brought on some chatter within the business across the present urge for food for company venturing.

The airline’s CEO Joanna Geraghty mentioned on the time that JetBlue is concentrated on its “JetForward” technique, which goals to return the provider to profitability. 

Further offers within the quarter included Lighthouse scooping up advertising tech specialist The Hotels Network in addition to Duetto’s acquisition of HotStats. Elsewhere throughout the journey business, Juniper continued its latest spree with the acquisition of RezMagic whereas HBX, which went public in January, introduced it had purchased Civitfun.

Although there are rumors of plenty of different journey IPOs within the offing, enterprise journey platform Navan has been the one firm to verify lately.

The lack of funding for journey startups in addition to the shortage of exits had been mentioned throughout a latest interview with Nick Cocks, founder and managing accomplice of Singapore-based Velocity Ventures. He touched the present perspective to danger, boardroom paralysis and IPOs being shelved.

See beneath for the total session with PhocusWire’s Linda Fox: