UK traveltech sector flourishing with record investment, driven by artificial intelligence

A new report released today reveals the UK’s traveltech sector has reached record investment levels, with Edinburgh emerging as one of the UK’s key innovation hubs powered by advances in artificial intelligence (AI).

The comprehensive analysis from Dealroom, the leading data and analytics platform, commissioned by the Traveltech Innovation Hub at Edinburgh Futures Institute, part of the University of Edinburgh, highlights how the UK has become the third largest traveltech investment destination globally, behind only the USA and Canada.

The report shows UK traveltech companies have raised an impressive $1.6 billion since 2020 across nearly 300 deals, with 2024 marking a record year as investment reached $518 million – largely driven by AI-powered innovation.

Among the deals spotlighted was the $370 million secured by London-based Lighthouse in Series C funding in November 2024. The company uses artificial intelligence to optimise hotel pricing and distribution strategies. Also highlighted is Unravel, which just last month secured $7 million in Series A funding for its AI-powered video platform that transforms inspirational content into bookable travel experiences.

Outside of London, Scotland is emerging as a UK travel tech hub, with more than 100 travel tech startups registered there. One company, Obvlo, recently raised $2 million to develop AI solutions for producing and maintaining personalised local content at scale for travel and hotel brands such as Virgin Hotels. And Barcelona-based travel management company TravelPerk just announced the opening of a new office in Edinburgh.

However, the report, the first to examine the UK’s traveltech sector in detail, also highlights challenges within the sector, noting that only 6% of traveltech venture capital funding in Europe went to startups with a female founder between 2022-2025.

Joshua Ryan-Saha, Director of the Traveltech Innovation Hub at the Edinburgh Futures Institute, said: 

“The findings demonstrate the UK’s position as a global leader in travel technology innovation. Edinburgh, with its world-class AI expertise and dedicated innovation ecosystem, is particularly well-placed to drive this sector forward. The Traveltech Innovation Hub at Edinburgh Futures Institute will continue to support and bring together the emerging traveltech industry locally and globally, encouraging data-driven and futures-focused learning and collaboration.

“The application of artificial intelligence across the traveltech landscape is transforming every aspect of how we discover, book and experience travel. This is creating significant opportunities for innovative companies, particularly those leveraging Edinburgh’s excellence in AI research and development.

“Clearly, more needs to be done to support female founded companies in Europe and that’s an area the industry needs to focus more effort on in the coming years.”

Callum McPherson, CEO and founder of Obvlo, said:

“Scotland offers the perfect combination of talent, world-class universities and robust early-stage investment to develop an exceptional tech ecosystem. By focusing on traveltech, we can leverage our strong tourism economy and the presence of established industry leaders to create a launchpad for the global stage. Obvlo is excited to collaborate with the Edinburgh Futures Institute to drive the future of travel technology in Scotland and beyond.”

Beyond AI, the UK traveltech sector shows strength across multiple sub-sectors with particularly strong investment in SaaS (Software as a Service) for hospitality. Over $480 million was invested in 2024 in solutions that enhance operational efficiency, improve guest experience, and optimise revenue; and more than $60 million was invested in the same period in solutions addressing payments, expense management, and financial services for travellers (Fintech).

The UK’s travel and tourism sector more generally has demonstrated remarkable resilience, with its contribution to GDP climbing to 10% in 2023 to reach more than $252.4 billion, surpassing the pre-pandemic peak of 2019.

Eglantine Dupuy, Research Associate at Dealroom, said:

“UK traveltech raised $519m in VC funding in 2024, a record high. The travel sector has proved itself to be resilient post-pandemic but it’s notable that the number was significantly boosted by AI-focused companies. We are seeing many startups using artificial intelligence to supercharge innovation across the sector — from personalised content and booking platforms to revenue optimisation tools.”

The Traveltech Innovation Hub at Edinburgh Futures Institute provides a dedicated physical space for traveltech companies to collaborate and grow, offering research partnerships focusing on cutting-edge AI innovation, academic expertise, student talent, and vital connections between entrepreneurs, tourism businesses, investors, and universities.

The full Dealroom report is available here – https://dealroom.co/guides/traveltech