Investors in APAC travel startups are either smarter or madder than elsewhere


Okay, it’s not as simple as that, obviously, but there is a considerable shift in the regions that attract the funding for travel startups in the last 12 months.

Whereas traditionally the US (and Silicon Valley, in particular) had been considered the centre of the universe – both culturally and financially – as the place any ambitious new business should base itself, things have changed rapidly in a very short space of time.

For example, between 2005 and 2009, just $228 million was invested in travel startups in the Asia-Pacific region, translating into around 22% of the overall pie shared around the world.

Figures from Phocuswright, shared during the Bootcamp day at the WebinTravel conference in Singapore this week, showed that North American travel startups captured 66% of the global funding rounds over the same period.

Europe managed just 12% of the 993 being tracked by the travel research specialist.

Things started to change during 2010 and 2013, when APAC increased its share to 30% and North America slumped to 37%. Europe more than doubled its tally and other regions also began to have a nominal presence.

Fast forward another 12 months to 2014 and North America has fallen further to 27% (the annual figure does include the mega-round of $2.4 billion going to Uber) as APAC has almost doubled in the space of a year to 55% of the disclosed funding rounds.

Europe was almost back to the level it had between 2005-2009.

There have been some sizeable rounds going to some of the travel startups focusing on ground transportation in Asia-Pacifc, but across the 267 companies in the region being tracked by Phocuswright the average round raised was $14.5 million last year.

There is the obvious explanation that Asia-Pacific is a larger and younger market in the travel sector which turns the eyes of the investors eastwards, with the maturer region of North America in particular arguably having exhausted both the enthusiasm and potential for truly disruptive new businesses to make a mark.

But, interestingly, listening to many of the startups in Singapore this week there is a lot of capital investment flying around in APAC into businesses that were either dismissed out of hand or made next to no long term impact in North America a few years back, such as deals, trip planning and peer-to-peer marketplaces.

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Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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