Investments in travel companies currently are nowhere near the scale of 2019 - for obvious reasons.
While there have been a handful, including one or two sizeable rounds, the likelihood is that the terms were on the table before travel shut down in the first quarter of 2020 due to the outbreak of the coronavirus.
Investors are currently advising startups to focus on customers, use the time to develop the product and make themselves as agile as possible.
But, what of the “contrarian investor” who is prepared to take a punt on travel now, mid-pandemic?
The question was posed by Frank Lin, principal for corporate development for Google in Greater China, Japan, South Korea, Australia and New Zealand, to a panel of investors during this week’s WebinTravel Travel Zero.0 event.
Christian Saller, general partner at HV Holtzbrinck Ventures, says that the real problem is the uncertainty over how long the crisis will last.
The investment company, which has backed startups including Tourlane and Limehome, is still holding off on travel activity and, currently, startup founders are more optimistic than the financial community.
Another reason for a reluctance from investors to stump up cash for travel startups is the lack of available market data, especially during a period where there is little to benchmark the crisis against.
Amit Anand, founding partner of Jungle Ventures, says: “It’s been hard to call opportunities in the travel sector. I don’t think it’s for a lack of intent, we’re all very optimistic about the long term potential.
"It’s just that it’s very hard right now to understand customer behavior and if you’re investing in companies that need to demonstrate product market fit or go-to market fit, there isn’t anything to go by.
"There’s literally no data to support it. We’re looking at a long period of not knowing if a product is going to be bought by customers or the channels are working.”
His advice to startups is to invest in a product that can survive beyond the pandemic.
“I’m pretty excited [to be] in investing even in travel. It’s the best time to go and build something crazy. Keep it low burn, invest time, effort and capital in building a product that you know, beyond COVID, is going to be there. That’s something maybe will excite an investor.”