2018 will be the year of travel tech acquisitions
Do you own a startup? Ideally in the travel tech industry? Well, lucky you! Why? It seems that 2018 will be the year of travel tech acquisitions.
Recent Travel Tech Acquisitions include MEZI and Routehappy
The year is still young but the first travel tech acquisitions in 2018 have been completed. MEZI, an AI-based virtual travel agent, was just acquired by American Express Travel and Routehappy, an industry leader of rich content provision, has been bought by ATPCO. There is a general trend in more investments and acquisition into travel tech.
Since 2013, the number of corporate-backed deals directed towards travel tech startups has been growing from 18 deals totaling 154 million USD to over 65 deals worth 1.7 billion USD in 2017. The good news is that not only startup and companies in the US are profiting from this trend. Especially emerging markets have attracted unseen investments and acquisitions over the last year. Despegar, for example, the Latin American travel unicorn, launched successfully its IPO in 2017 and an Indonesian travel platform, Traveloka Indonesia, raised 500 million USD the same year.
Looking back, the travel industry was one of the first sectors which was disrupted and heavily impacted by the internet. Today, it attracts more and more investors and VC interest to continuously attack existing markets and to create new ones. We talked about the corporate travel sector still being far behind its potential and as well the group travel industry is a sector which has still a lot of space for innovation. Thus, we will see more travel tech acquisitions coming up because for many companies it seems to be the best way in order to gain access to innovation to stay ahead of the competition.
Interesting about the two acquisitions mentioned above is that both companies where still fairly new in the market. They were either piloting their technology or they just started a licensing deal. In addition, both companies will incorporate as independent subsidies with the freedom to keep their management and continuing what they have started. This early stage acquisitions show the almost desperate need of big industry player to continuously look for new innovations.
Maybe one of the most interesting funding rounds in 2017 has been the 1 billion US capital raised by Virgin Galactic to continue its mission of offering private travel to space. On the same note, yesterday, Elon Musk successfully launched his Space X rocket to follow the same path. Another area of travel which will create a lot of space for innovation.
The last years have been good for startups and travel tech acquisitions. 2018 already started with two major transactions and the trend shows that travel tech remains a key sector of interest for investors and acquisitions. Let’s watch the space!