A brand new period for journey startup investing

Phocuswright has tracked and analyzed the digital journey startup panorama for over 15 years, and as of November 2024 there have been almost 8,000 corporations in our Journey Startups Interactive Database. All the info introduced on this report, and way more, is accessible within the on-line database.  

Journey startups have weathered a drastic funding downturn over the previous two-plus years, however restoration is on the horizon. All indicators level to a rebooting of the enterprise capital cycle. But the long run might look nothing just like the previous. Generative synthetic intelligence (GenAI) and its progeny, significantly autonomous brokers, are primed to revolutionize your complete journey reserving funnel in addition to rework how startups and buyers function. 

Leveraging information from Phocuswright’s proprietary startups database, this report presents a complete evaluation and outlook for journey startups in right this moment’s difficult funding atmosphere.    

 5 key takeaways

• Funding to journey startups dropped to just about a 10-year low in 2023, coming in at $5.2 billion. By way of the third quarter of 2024 (3Q24), funding rests at $4.3 billion, placing it roughly on observe to be on par with 2023. 
• 2023 marks by far the bottom exercise on file on the subject of funding rounds accomplished.. 
• The subsequent period of journey startup funding might look nothing just like the final. Generative AI is anticipated to rework the journey trade in addition to how corporations function, probably shifting trade dynamics and decreasing the necessity for funding in the long run.
• Funding to B2B-oriented corporations in 2024 has overtaken B2C for the primary time, reaching 51% of whole funding as of 3Q24. This shift could also be partly pushed by clear use circumstances of generative AI in B2B areas like customer support, workflow automation and information analytics.
• Europe leads in regional funding share in 2024, pushed by progress in mobility and company journey sectors, whereas the U.S. maintains a dominant place on the nation stage. 

Methodology 

This report strikes a steadiness between analyzing funding to startups and inspecting latest funding raised by vital gamers in journey tech no matter their age. Thus, it options evaluation of technology-oriented journey corporations based any time previously three many years, and it measures funding raised by these corporations over the previous decade – particularly between the start of 2014 and the third quarter of 2024 (3Q24). 

Modifications to the info and methodology:  

*In mid-2024, Phocuswright enhanced its information assortment processes and added hundreds of corporations to the database that weren’t included beforehand. This almost doubled the variety of corporations on this evaluation in comparison with earlier experiences. This annual report has traditionally been titled The State of Journey Startups and analyzed startups based inside a sure date vary (e.g., the previous 5 or 10 years). In 2023, provided that well-established corporations have been among the many principal entities elevating cash, we expanded the vary to incorporate corporations based at any time previously three many years, and titled the report as The State of Journey Funding. This yr, we switched the emphasis again to startups, however retained the expanded based date vary.  

To keep away from skewing the evaluation, corporations which have raised greater than $4 billion or solely function tangentially in journey (particularly, autonomous automobile corporations) have been excluded from the analyzed dataset except in any other case specified. Because of this, 35 corporations (e.g., Uber, Didi, Airbnb, Cruise, Waymo), which have raised $117.3 billion, are excluded.

**Funding consists of publicly disclosed quantities of enterprise capital, personal fairness, crowdfunding, debt and different kinds of conventional funding rounds. Greenback quantities related to IPOs, acquisitions, mergers and post-IPO investments have been excluded from the analyzed dataset.