The AI-Native Edge: Travel Startups 2025 report revealed that while travel startup funding recovered slightly in 2024 to $5.8 billion, the likelihood was that it would dip to below $5 billion in 2025.
Funding for the year kicked off positively with corporate travel management specialist Perk (previously TravelPerk) securing $200 million in a Series E round. Klook landed a $100 million a few weeks later, and RoomPriceGenie and Mews added $75 million to their individual coffers in the first quarter.
Large funding rounds were few and far between otherwise in the three-month period, with a similar slow pace tipping into the second and third quarters. Rounds of note included Ramp with $200 million, Canary Technologies with $80 million and $60 million for Fora, a PhocusWire Hot 25 Startup for 2023.
Standout rounds in Q3 included WeTravel with $92 million, a further $500 million for Ramp, Gathern with $72 million and Airalo's $220 million round. And, tours and activities platform Peek seemed like the only large round in the final quarter with its $70 million round.
While there were multiple smaller rounds, the advice from investors to startup founders throughout the year was to have as much runway as possible.
Operate as if the next round is not coming was how Roopak Pati of Oppenheimer put it during an interview in the PhocusWire studio at The Phocuswright Conference 2025.
“Always be mindful of the cash you currently have and how to operate that way, and have a plan B,” he said.
“With all of the advancements happening in AI and with all the efficiencies that can be gained and with folks really excited about adopting technology, I think it's a really exciting time to be building technology,” said Betsy Mulé of F-Prime Capital, who joined Pati in the studio.
She also flagged how developments from the AI platforms always include a travel booking example, making it hard for many B2C travel startups to see a clear path forward.
Pati and Mulé also discussed recent initial public offering (IPO) activity and the investor interest in companies including Navan, which went public in late October and Klook, which took its initial steps towards IPO in November. They are also keeping an eye on other “tech-forward” companies in the space such as Perk and Engine.
Since those announcements, OYO has also filed for its IPO in India, as has TravelPlus-owner Travel Tech Limited.
Additionally, Pati and Mulé touched on mergers and acquisitions activity and their expectation for it to pick up in 2026, particularly in the U.S. as there is more clarity around visas, immigration and inbound travelers. Larger online players such as Expedia Group and Booking Holdings may be back in the frame for acquisitions too, having been quiet in recent years, according to Pati.
In December, Expedia announced its acquisition of tours and activities platform Tiqets.
Notable transactions completed in 2025 included HomeToGo’s purchase of Interhome, Casago’s acquisition of Vacasa, Marriott’s deal to buy CitizenM and Rategain’s acquisition of Sojern. Meanwhile, Sabre offloaded its hospitality solutions business to TPG for $1.1 billion and American Express Global Business Travel finalized its acquisition of CWT.
Mulé and Pati also spoke on the difficulty in pinpointing winning business models and investors placing more bets of smaller check sizes, a sentiment echoed by peers in another recent interview.
See below for the full interview with PhocusWire's Linda Fox.