Money, moats and the AI mirage: What it takes to build and fund a startup now

There is a peculiar kind of vertigo that comes with being a travel technology founder right now. On one side, Silicon Valley is minting billionaires at a pace not seen since the dot-com era. On the other, investors are skittish, M&A is grinding, and raising a seed round can feel like pushing a boulder uphill.

That paradox was laid out by Chris Hemmeter of Thayer Investment Partners as he kicked off the panel “Funding, Exits and The New Travel Startup Landscape” at Phocuswright Europe recently in Barcelona.

“It doesn’t really matter how many decades you’ve been in the business,” said Roger Sharp, founder of Northridge Partners and chair of Web Travel Group. “This is a confusing time.”

Another paradox was pointed out by Callum McPherson, founder and CEO of OBVLO, an Edinburgh-based AI-powered destination content and personalisation company. He said that while AI is where the money is going, AI is no longer a business in itself.

“Having software is probably not a great moat anymore,” he said. “It’s become too easy to build.”

What endures, in his view, is deep embedding in customer workflows, genuine understanding of the outcomes clients are paying for, and an architecture flexible enough to improve as new models emerge rather than be threatened by them.

OBVLO builds destination content at scale with AI. McPherson is careful about how he frames it. “I don’t think we use AI to build tools and give those tools to our customers. We use AI to build systems, which we use to deliver outcomes to the customer.”

He believes the distinction matters. Sell the tool, and you become replaceable the moment a better tool appears. Embed yourself in the delivery of results, and new models become fuel for your engine rather than a threat to your existence.

He described a recent investor conversation, in which the first question was: do your customers know you use AI? “I said, no – do they need to? AI is how we deliver it. They’re not buying AI from us. They’re buying outcomes.”

From left: Leyla Allahverdiyeva, SVP of Global Sales and Partnerships at Nuitee, Callum McPherson, founder and CEO of OBVLO, Roger Sharp, founder of Northridge Partners and chair of Web Travel Group, Chris Hemmeter of Thayer Investment Partners

Leyla Allahverdiyeva, SVP of Global Sales and Partnerships at Nuitee, a travel infrastructure business, offered another perspective. Nuitee, which operates as a travel infrastructure layer – enabling direct hotel connectivity without intermediaries – found itself in the unusual position of not needing to fundraise in the traditional sense. Growth made the case before the pitch deck did.

“We were very lucky. We had such great growth that we didn’t even have to go into fundraising,” she said. “But that trajectory is very important, that growth, and the profit you’re actually making.”

What has accelerated Nuitee’s momentum is its positioning as infrastructure rather than product. For example, the company currently powers the hotel vertical for Grab, the South-east Asian super app with over a billion users.

Grab, she explained, didn’t want another intermediary. They wanted a partner who could become structurally embedded in their ecosystem. “They wanted an infrastructure company that could combine all those modular services and become a strategic partner rather than just a supplier.”

Nuitee is growing at a rapid pace. “We don’t sleep much,” Allahverdiyeva said. “But it works.”

Switching the conversation to public markets, Sharp said, “The public companies I chair live in a completely different world.”

Their shareholders, he noted, are often relatively young investors who have not lived through market cycles, who can panic at an AI headline and sell a stock down 30% overnight. “They see the AI paradigm and they can panic, they don’t know what’s coming.”

He offered two case studies that illustrated the strange logic of the current moment. In one, a founder of an AI business explained why he wanted to be acquired by a 20-year-old software incumbent: “Nobody’s going to buy from some no-name business and trust all their data with us. We need an established brand.”

Trust, in other words, is a moat that legacy companies hold and young ones have to borrow. In the other, Sharp’s company Web Travel Group acquired an Israeli machine learning business –but as a public company, the scrutiny on price and optics is intense in a way private acquirers simply don’t face.

Hemmeter voiced a larger worry. Capital is chasing hypergrowth at almost any valuation. Public markets are demanding discipline. And somewhere in between, the music will stop.

“SpaceX is at over 200 billion market cap on trivial revenue,” he noted. “At some point, the music stops. We’ve seen this movie before – this part of the dot-com movie, we’ve seen before.”

Sharp brought it down to ground, telling startups in the room. “If you’re solving for a significant pain, you’re meeting a need. If you grow fast, your economics work, somebody needs you.”

The front door question: Nothing black and white about it

No travel technology panel in 2025 can avoid the question of how AI is changing the way travellers plan and book and what that means for everyone downstream.

McPherson pushed back on the binary framing. “We talk about it as if it’s black and white – search dies, agents take over. I don’t think it’s that simple.”

He cited a data point – the number of people listing travel agent in their LinkedIn title grew 25% last year. “Why are more humans coming into that process? It’s counterintuitive, but worth asking.”

Allahverdiyeva focused on speed as the critical variable. As AI agents proliferate and consumers increasingly expect instant access to travel inventory, the companies that can onboard and integrate quickly will have an enormous advantage over legacy players who take months to certify and connect.

“How fast can we get them access to travel inventory? That’s very important. A lot of legacy companies – it’s going to take months. We can do it in days.”

Sharp cut to the economics. His B2B business is growing at 20% with 40% EBITDA margins and trading at five times. “I don’t care where the front door goes,” he said.

Most overfunded category in travel technology? “Itinerary,” said Sharp.

Most underfunded? McPherson nominated services businesses, including travel agents.

Allahverdiyeva pointed to content infrastructure, an area she argued is frequently given away or underpriced in the race to win distribution.

And the widely held belief about AI and travel that will prove wrong by 2030? Said Sharp, “Anyone who thinks Expedia, Booking, Trip.com are going away and being disrupted is just wrong. They will reinvent themselves.”

McPherson suggested that AI agents, far from disintermediating the OTAs, may simply become the new middlemen – connecting to them the way travellers once searched through them.

Allahverdiyeva held out for the human element: “The human will still be needed, especially on complex journeys. I think everyone is thinking AI will solve everything. It won’t.”