Travel investors on trip planning and using B2C as a sandbox

The dip in funding to travel startups has led to more realistic valuations, according to investors in the space.

While most investors are more risk-averse currently, some continue to see travel as ripe for investment and maintain it has been underfunded for more than a decade.

Bobby Demri, founder and managing director of Roch Ventures, is an outlier. The Europe-based fund of €150 million focused on travel startups has made one investment, WeSki, and is working on others.

Speaking in the PhocusWire Studio during Phocuswright Europe 2023, he said companies now understand valuations were too high and there has been an "adjustment in what they said to investors in the past few rounds to what they are saying now."

Rod Cuthbert, an industry veteran best known for founding Viator, agreed that entrepreneurs are now more realistic.

"If you get some crazy valuation for your company that surprises even you, you get filled with hubris and unrealistic thoughts," he said. "You hire too many people, you think you're important and that you have momentum. Momentum in fundraising is great, but it's not momentum that has any basis in reality in terms of traffic to your website or number of bookings. It's really good to shift the focus from an investment round as success to progress in your business."

The investors went on to discuss where to put funds currently with Demri looking for a solid sustainability startup and Cuthbert sharing that he had invested in the United Kingdom-based no flight travel startup Byway Travel and believes there's huge potential for the company to partner with larger players going forward.

The pair also discussed whether B2B startups should have a B2C arm, even if it's only a small one, with Cuthbert saying it enables companies to try things out on consumers. Demri disagreed and said the testing can be done with B2B customers, and he raised concerns over the huge marketing investment for B2C plays.

Watch the full interview with PhocusWire's Linda Fox here.