The top two causes are particularly pertinent to the travel industy, given its competitive nature and a vast array of companies often doing the same thing. Ran out of cash/failed to raise new capital - 38%ĬBInsights says the percentages exceeded 100% as many businesses offered multiple reasons for a failure.What are the top reasons that startups fail?ĬBInsight's analysis of more than 110 failed businesses came up with a list of the top 12 causes: Travel funding may have hit a low in 2020 but there were some signs of a recovery emerging in early 2021, with a string of big checks being the sent the way of Travelperk, Getaway, EasyMile, GoSharing and Momenta, among others.īut the sad reality is that travel startups, during any period of time, without a global pandemic to contend with, experience vast challenges to get them competing alongside existing and (sometimes) profitable companies.īarriers to entry and often considered low but the failure rates of new businesses are inexplicably high (upwards of 75%, depending on the measurement) - for many reasons.īusiness intelligence service CBInsights recently produced a report to unravel the causes behind some members of the wider startup community's inability to survive.
Pre-pandemic 2019 saw $7.4 billion of investment go into travel startups. In 2020, Phocuswright's annual State of Startups Report, which has tracked the digital travel startup landscape since 2009, expected about half the amount of funding to come the way of startups during the year when compared to 2019. The last 18 months may be considered a write-off when it comes to comparative analysis of the travel startup landscape.Ĭompanies of all shapes, sizes and ages have faced enormous challenges as their markets have disappeared overnight and any return to some sense of business as usual has been lukewarm at best for many.
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