Yet another Online Travel Agent is looking to raise funds: Yatra Online is raising Rs 200 crore from Valiant Capital, Norwest Venture Partners and Intel Capital, reports The Economic Times. Norwest Venture Partners, Reliance Capital, Network 18 and Intel Capital have previously invested Rs 150 crore in the company. Some parts of the funds will be used for expanding Yatra’s holiday and hotel booking segment, and for acquisitions, Yatra CEO Dhruv Shringi has told the publication.
Speaking at a recent conference, Shringi had said that domestic flight sales account for one third of all online sales for Yatra, International flight sales are just at 2%-3% at this time, and the sale of holiday packages is minuscule. Yatra is aggressively pitching its holiday packages and reducing costs by chartering flights, to fuel sales.
The company also plans to use part of the funding to expand branding and marketing activity in tier-2 and tier-3 cities. It also plans to strengthen its offline network and increase the number of its physical stores to 50 from the existing 34 over the next one year.
According to a report filed with India’s Registrar of Companies, for the year ending 31st March 2010, Yatra Online Private Limited reported Net Loss (before tax) of Rs. 8.26 crore, down year on year from Rs. 14.09 crore. During the year, the company reported gross billings (including Rs. 78 crore inbound billing by other agents) of Rs. 1032.50 crore for ‘Air passage’, Rs. 48.2 crore in hotel bookings, and Rs. 21.1 crore in ‘Other Services’, including rail fares. In comparison, the previous year, it had reported Air Passage revenue of Rs. 892.4 crore (of which Rs. 52.4 crore was inbound billing made by other agents), Rs. 48.2 crore in hotel bookings, Rs. 24.1 crore in hotel bookings, and Rs. 21.8 crore in ‘Other services (including rail fares)’. Note that these are gross billings, and the company would have made a commission on the sales.
Eye On IPO
Shringi informs ET that Yatra is planning raise additional funds – rather give some of its investors an exit – by filing for an IPO within 12 to 18 months. For the travel segment, the September-December quarter is typically the best quarter of the year, so one can expect them to go to market with numbers for that quarter. Following MakeMyTrip’s IPO, one should expect others to follow suit, else face stiff competition from a peer who can out-spend them. Recently, Via announced plans for a $1 billion IPO, and Cleartrip raised $40 million in funding by selling a minority stake to a NASDAQ listed travel management solution provider. International players like Expedia are also eying the Indian market. The company recently formed a joint venture with Air Asia to operate its business in India.
(with inputs from Nikhil Pahwa)