European startups are attracting half as much funding as their US and APAC counterparts, according to the annual State of Travel Startups report by travel analyst Phocuswright.
London leads the pack, with 89 startups raising nearly $500m last year, but Europe as a whole received just 15% of traveltech funding last year.
Although Europe and the APAC region see a similar number of startups founded, APAC raised 32% of global publicly-disclosed funding.
Both were beaten by the US, which saw 40% of global traveltech startups founded there, along with 49% of cash raised.
Of all European startups identified in the study, 12% were acquired in 2014, while one in five shut down.
Analyst Chetan Kapoor mainly puts this disparity down to “excessive regulation” in Europe, where protesters and governments have come out against companies such as Uber and Airbnb.
Uber alone represented 22% of publicly-disclosed capital raised in 2014, followed by Airbnb and Didi Dache, China’s answer to Uber, both taking 7% each.
Ground transport companies like Uber and Hailo lead in terms of total funds raised, followed by private accommodation providers including Airbnb.
This is the fourth year that Phocuswright has conducted this research and its coverage of startups has increased four times, from 250 to 993 worldwide
“What’s been most impressive is the rise of ground transport as a segment, almost singlehandedly done by taxi-hailing apps like Uber and those in different parts of the world like Didi Dache and India’s Ola,” analyst Chetan Kapoor told Tech City News.
“The most difficult area for startups is trying to disrupt traditional online hotels. For startups to create value, it is an uphill task.”
Funding for mobile travel startups grew 1832% between 2011 and 2014, with one in five new companies now pitching themselves in this category. Business models are typically booking-related.