TravelPerk kicked off the year with some big news: The late-stage corporate travel tech startup raised $200 million and acquired another company. Both developments were wrapped into a single announcement that exemplifies a major trend in travel tech right now: A surge in acquisitions by private-equity backed software companies. Private equity firms have accumulated an estimated $3 trillion that they need to deploy, and roughly $300 billion of that is earmarked for tech, according to investment banks we spoke to. These private equity firms have been leading large fundraises for late-stage startups that are working to modernize behind-the-scenes software that powers the travel industry. And those startups are deploying that newly raised capital to grow their businesses organically and via acquisitions. Investment bank AGC Partners says these PE-backed players are going on a “feeding frenzy” to acquire smaller companies and consolidate their respective markets. AGC Partners estimates that there were roughly 180 M&A deals in travel tech last year, accounting for roughly one-third of all tech deals. That number has been steadily increasing since the low of roughly 77 deals in 2021.“This is by far the biggest year that the space has ever seen from a transaction perspective in terms of count,” said Jonathan Weibrecht, partner at investment bank AGC Partners.We’ve spoken to nearly a dozen founders and CEOs of companies that secured large fundraises over the last year, and nearly all of them have said M&A is on the radar. Investment bankers and private equity investors say they’re expecting an even busier year in 2025.Driving the action: Tech systems need upgrades to handle unprecedented growth in travel, and private equity firms are deploying billions to take part. In 2025, expect more consolidation as well-funded late-stage startups buy up smaller players, reshaping the industry’s behind-the-scenes infrastructure ecosystem.“We expect to see more activity in 2025 than 2024 in terms of number of deals,” said Min Liu, managing director of the travel practice for investment bank Cambon Partners.Nearly every major late-stage startup platform has just raised capital or is in the process, Weibrecht said. Flyr, for example, raised $225 million toward its effort to replace the decades-old airline retail infrastructure with something akin to online shopping. Lighthouse raised $370 million for a platform that helps hotels make decisions about pricing, promotion, and distribution. And Hostaway raised $365 million for short-term rental management tech. Source: Cambon Partners; AGC PartnersFollowing that trend, there likely are more large capital raises coming in 2025.“Private equity hasn’t really paid a lot of attention to travel much at all for a long time. I think it’s a sign of maturity within a market when you see private equity coming in,” said Laurence Tosi, managing partner and founder of WestCap. Tosi was Airbnb’s CFO f
Lun. Feb 3rd, 2025
