Skift Take
It's theoretically a great time to be investing in and creating hospitality tech startups with more hotels wanting to drive direct bookings and online travel agencies interested in getting their piece of the pie. But several factors, such as uncertainty with stock markets around the world, are making investors more cautious about if, and how much, they invest in these companies.
Hotel and alternative accommodations booking and tech startups raised about $550 million during the first two quarters of 2016, mostly for consumer-facing platforms, and while this amount might seem like a huge chunk of change some investors say this represents a slow down in funding.
Each week Skift tracks travel startup funding rounds of at least $1 million or more and only included those rounds in this story. Thirty-three companies are part of our analysis, which we draw from Crunchbase funding announcements and direct outreach from brands. See charts below for a breakdown of funding by company.
Of those companies, 19 have consumer-facing products and the remaining 14 offer B2B services and software for hotels, alternative accommodations and vacation rentals. Thirteen of the companies raised seed rounds, 12 raised Series A rounds, three raised Series B rounds and the rest were Series C and D. About $100 million of this funding went to startups specifically focused on the vacation rental market.
Notably six of these companies are based in India, including hotel booking sites Ibibo, Oyo Rooms and Stayzilla.
Skift began tracking travel startup funding during the second quarter of 2015. While we don't have an apples-to-apples comparison for how the first two quarters of 2015 compare to 2016, last year we found hospitality technology such as software solutions for hotels and booking sites for guests was one of the most well-funded sectors for full-year 2015.
But some investors are saying that likely won't be the case this year as hospitality startup funding, at least for larger Series A rounds and on, experiences a downward trend.
Slowdown in Funding
Many investors aren't readily pumping money into hospitality startup companies as they perhaps did in recent year
