Best Travel Startups In The World – We looked at all the startups that are making travel greener by tackling global sustainability issues like overtourism, flight shaming and more.
When Greta Thunberg crossed the Atlantic in a zero-carbon boat to attend the UN. Climate action summit this summer, she made global headlines from Sweden to Japan. Shame on the flight. Extreme tourism. Green travel. These are just some of the buzzwords that have been making the rounds in the media in recent months. And there is a reason.
Best Travel Startups In The World
At no time in our history have people traveled so often and widely and in such great numbers. But we are only now realizing the effect we produce on the environment due to our daily movements. As more and more activists like Thunberg draw attention to the damaging effects of human-induced climate change, discussions of sustainable travel are becoming a daily conversation in the travel and airline industries.
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In fact, the number of monthly press articles in international media that discuss airlines in this context more than doubled in 2019 compared to the historical average of the last four years.
The development is even more dramatic when you look at Google Trends. Interest in search terms such as “CO2 compensation” and “atmosphere” or “miclimate” (the names of the two main flight compensation providers) more than quadrupled between August 2018 and August 2019.
These figures reflect growing pressure on the tourism industry to become more sustainable and green. Most airlines have already strengthened their net-zero emissions targets and stepped up research efforts to promote the development of biofuels – one of the most promising ways to limit CO2 emissions.
To answer that question, we went out and cut through the noise. Below is a comprehensive overview of how the startup world is tackling these issues and what kind of innovations we can expect to see in the future.
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In our quest to find startups pioneering the sustainability of travel & mobility tech, we were inspired by the Triple Bottom Line concept. The triple bottom line is a framework used in accounting. But instead of putting the emphasis only on the “bottom line” or profit and loss, it gives equal weight to a company’s environmental and social impact. This concept and its broader definition can best be described with the phrase “people, planet and profit”.
Since it’s hard to understand how startups—especially early-stage ones—fit this ideal just from desk research, we reached out to many of them and ended up defining a “sustainability startup”:
Based on this definition, here is our map of 50+ startups that are transforming the travel & mobility tech ecosystem towards a more sustainable future.
To showcase some of the work these startups are doing in more detail, we selected one startup from each category and crowned them champions of the sustainability category in their respective fields. Here are our winners:
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The German electric car manufacturer, founded in 2016, has launched its first solar-electric car, which features solar panels discreetly built into the car, reaching up to 34 km of extra range that can be generated from solar power every day.
Since 2006, Toulouse-based OpenAirlines has been working to reduce fuel consumption for airlines. Using big data from flight recorders to optimize the flight path, they managed to reduce the fuel consumption of the planes by 2-5%.
Founded in 2012 and based in the Netherlands, Bookdifferent offers a wide range of certified sustainable accommodation worldwide. Through strict partnerships with eco-labels and calculating the ecological footprint of each accommodation, they have standardized and simplified the booking of sustainable housing.
Since it was founded in 2012, London-based Much Better Adventures has focused on quality over quantity for its adventures. When it comes to sustainability, they take a three-pronged approach: they direct 5% of revenue to conservation efforts, support local communities and offset 4x the carbon footprint emitted by their customers.
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In addition to scouting the most relevant players in the sustainability arena of travel and mobility tech, we looked at the main underlying trends and patterns that characterize startups in our mapping. Some conclusions stand out:
Although not obvious on the map, the clearest trend we see is the general lack of venture funding for sustainability-focused venture funding in the travel and mobility technology sector. Half of the startups featured on our site are unfunded. Those that have been funded have raised less than $1 million in venture capital on average. These numbers pale in comparison to the size of deals we’re currently seeing in travel & mobility tech (see our trend report on the state of travel & mobility tech).
However, we expect the funding dynamics to increase significantly in the future, as sustainable travel is still very much a nascent industry. As both travelers and regulations push companies increasingly towards a greener business approach, funding will soon follow to meet the demand.
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By all accounts, the travel sustainability sector is expected to experience tremendous growth over the next few years. Over half of global travelers (55%) report that they are more committed to making sustainable travel choices than they were a year ago, according to Booking’s latest annual report on sustainable travel. Travel media house Skift projects that green business practices “will be the next big competitive advantage for brands selling to both consumers and business travelers.”
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– The set of techniques used to scale companies at breakneck speed in order to blow away competitors – is not an option. Sustainably growing at scale while avoiding greenwashing is incredibly difficult, meaning the growth required to achieve scale will be at a much slower pace.
A prime example of this is Patagonia’s controlled growth strategy, which commits the apparel and equipment company to growing sustainably at 3-4% each year rather than pushing for greater expansion. By developing their company with the mindset that they will still be around in a hundred years and focusing on creating sustainable products instead of looking only at profits, Patagonia can take more time to properly assess the environmental impact of their products and actions. It also helps them avoid the common pitfalls that often lead to greenwashing, such as putting more resources into green marketing than into green products.
A large proportion of the startups on our sustainability map focus on the B2C booking space (especially long-haul travel and accommodation). That makes sense. At a time when there is not much funding available for such ventures, startups are much more likely to succeed when they have few assets and do not require significant and expensive sales efforts (compared to B2B).
However, in conversations with startups and stakeholders, we often hear about the difficulty in bridging the huge gap between value and action around sustainability. Nowadays, everyone requires sustainability in one form or another. But people are largely unwilling to pay more for sustainable products and services. For example, it is estimated that less than 1% of air travelers use the CO2 offset mechanism offered by airlines and third-party providers, although the cost rarely exceeds $10 for most short-haul travel routes.
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In theory, businesses have a responsibility to act sustainably, but there is very little incentive to do so if customers don’t put their money where their mouth is. Because of this, we are seeing a second wave of sustainability startups that focus on serving the business rather than the customer. Many who previously sold directly to customers have also shifted to a B2B business model.
This makes sense for several reasons. One is that businesses have a greater incentive to ‘talk’ about sustainability, as they are much more accountable for their actions than the individual consumer. In addition, they face increasing pressure from regulators and the public to perform more sustainably. As a result, they are more willing to pay the premium than individual consumers.
This is not a bad thing. Instead of trying to convince everyone to travel more sustainably and fighting the uphill battle to bridge the value-action gap, B2B ventures can focus on the 12% of air travelers who generate 60% of revenue: business travelers. In a world where the global aviation industry produces about 2-3% of all man-made CO2 emissions, this is a more effective way to reduce emissions.
Overall, urban mobility is the segment with the most VC funding on our map with 63% of total funding. Most of the money goes to startups with a goal to reinvent the car.
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This shows quite clearly how important the car is in this day and age, not only in terms of use and as a status symbol, but also when considering the emissions generated by its use. The European Parliament estimates that passenger cars are responsible for approximately 13% of total CO2 emissions in the EU.
In this context, it is very encouraging to see the progress that electric vehicles (EVs) have made in recent years. But electric vehicles are not the holy grail, at least not in their current form. Their sustainability still faces criticism about the manufacturing process of lithium-ion batteries, as well as the fact that an EV running on electricity generated from fossil fuels is not exactly environmentally friendly.
That’s what we’re excited to see
