Skift Take
Skift has covered hundreds of travel startup funding rounds over the past few years, and we’ve spoken with numerous founders and investors about the state of venture capital. They all tell a similar story: There’s money to be had, but the bar is much higher now.
This month, an 11-year-old startup called Flyr raised the largest single round of venture capital for a travel tech company in years: A total package of nearly $300 million.
It's a tough time for startup funding, and the Flyr deal is a shining example of what investors are willing to bet on: Tech that promises to modernize outdated industries and has a real business model with recurring revenue.
Flyr’s basic pitch is to help airlines transform the retail experience into something more like online shopping with an AI-powered platform for dynamic pricing and personalized offers.
“We do deals that are tens of millions of dollars a year, and we do contracts that are five to 15 years in length,” Flyr CEO Alex Mans told Skift. “So that makes it a very, very strong business model with very high recurring revenue. And that, in turn, attracts great investors — especially long-term focused investors.”
Whether early or late stage, investors are more focused than ever on finding worthy startups.
“The number of companies that were raising in 2020 and 2021, it was just enormous compared to what we're seeing today,” said Gaurav Tuli, partner of F-Prime Capital, the fund affiliated with Fidelity Investments. “It's far, far fewer companies raising, and also of much higher quality today.”
F-Prime Capital has invested in travel tech companies including Lighthouse, Canary Technologies, ConnexPay, and AvantStay.
Skift has been tracking startup funding in weekly columns for years and the change is all too clear. We’ve spoken with founders who’ve run out of money and those who've made it through several funding rounds. And we’ve spoken with investors about what they’re looking for now. From after the go-go period post-pandemic to the depths of 2022 and 2023, they all tell a similar story: There’s money to be had, but the bar is much higher.
The Flyr platform is meant to make the airfare retail experience more like online shopping. Source: Flyr No More Money: ‘The Trough Is Closed’For startups, the early 2020s felt a lot like the late 1990s.
During that first Internet stock boom, investors flooded the market with billions of dollars, betting on unproven tech startups that promised to become gold mines with the genesis of the world wide web. Many of those startups did not have much more of a business plan than