Why Travel Tech Investors Keep Missing the Mark

Investing legends warn that success comes from avoiding big blunders, yet travel-tech backers keep repeating the same mistakes. Artificial-intelligence entrepreneur and VC Gilad Berenstein says writing a check that later proves worthless is not the failure; the real error is funding a start-up you never should have touched because due diligence fell short and you drifted beyond your “circle of competence.” In travel, that lapse happens often. New founders court praise, valuations soar and investors forget where their expertise ends, leading to bad bets and even worse guidance.

The odds are stacked against them. Timothy O’Neil-Dunne of T2Impact notes that accelerators like Y Combinator expect only a handful of winners from hundreds of hopefuls, and entire sectors can drain billions before a single unicorn appears. Electric vertical takeoff and landing vehicles attracted roughly $35 billion despite little proof any company will repay it. F-Prime Capital partner Gaurav Tuli calls travel a uniquely tough arena: most early-stage firms fail, and the rare outlier must return an entire fund. Investors inevitably make wrong calls; what matters is being right on the few that truly count.

Angel investor Pierre Becerril, founder of Directo, argues many VCs “buy the hype” and apply generic marketplace playbooks to a fragmented, seasonal industry where logistics are heavy and repeat demand is limited. They overlook the real assets—local supply access, long contracting cycles and deep operational know-how—and overpay for flashy growth curves that can’t scale. When outsiders try to “disrupt” without respecting those realities, burn rates soar and runway disappears.

Even seasoned specialists misjudge timing. Tuli says F-Prime sometimes underestimates how quickly a smart team can expand its addressable market, as Lighthouse and Canary did, but also backs talented founders whose markets turn out to be structurally flawed. No amount of skill can compensate when regulation tightens or distribution economics don’t work.

Richard Valtr, founder of hospitality cloud platform Mews, thinks many European investors compound the problem with unrealistic timelines. They demand hockey-stick revenue too soon and obsess over spreadsheets instead of the founder’s vision and industry dynamics. Early-stage funding should bet on teams and technology, not cell formulas, he says. Patience pays off; pushing for immediate profitability stifles innovation.

Because money can be more hindrance than help, founders must choose partners carefully. Exceptional entrepreneurs may have a queue of suitors, but the best pick investors who bring sector knowledge, networks and conviction rather than “dumb money”—capital without competence in the category. That alignment is critical once turbulence hits.

Mistakes will always shadow venture investing, especially in travel where macro shocks, regulation and consumer fickleness can upend plans overnight. The antidote isn’t avoiding risk but knowing exactly which risks you understand. Staying inside the circle of competence, valuing granular industry expertise over hype and allowing realistic horizons for returns won’t guarantee a win, but they shrink the field of fatal errors—and in a game where only a few home runs matter, that discipline separates the tourists from the pros.

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Why Travel Tech Investors Keep Missing the Mark

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