TravelGuru CEO Ashwin Damera’s response to Medianama.com regarding the story about the company being acquired by Expedia:
I’m disappointed that mere speculation is being published in the form of a “story”. Many people have called me based on this hearsay and what they have read online.
There are many inaccuracies in these reports – the biggest being – there has been no deal signed!
What more is there to deny?
Translation: The valuations reported were completely out of whack. No deal has been signed yet, but that doesn’t mean one will not be. It will be difficult for me to deny anything else on the record, so this is all I have to say.
Original Story: Online travel portal TravelGuru has sold a majority stake to Expedia, the largest OTA in the world, reports VCCircle. We had also heard that TravelGuru had been acquired, but weren’t able to confirm this last week. BCCL also had a Private Treaties investment in TravelGuru, and I’d asked Private Treaties CEO S. Sivakumar about the TravelGuru being bought by Expedia last week, but he offered no comment. As per the report, the majority stake has been acquired for $17 million, at a valuation of $30 million for the combination of TravelGuru and Desiya.com.
Something about these numbers doesn’t seem to be correct. If you go by earlier news reports, TravelGuru had acquired hotel aggregator Desiya for $25 million. So either the Desiya acquisition was overstated by a significant margin, or the $30 million combined valuation for TravelGuru and Desiya is understated. Either way, this doesn’t seem to be a good sign for the OTA business, which has attracted significant VC Funding.
TravelGuru was founded by Ashwin Damera and Ganesh Rengaswamy, and had received $10 million from Sequoia Capital India in the first round, and $15 million from Battery Ventures and Sequoia Capital India in the second round. Given the competition in the OTA space, the company had positioned itself as a hotel aggregator (courtesy Desiya), and this appears to fit well with Expedia’s outlook. What remains to be seen, is whether TravelGuru and Expedia will operate as separate entities, or combine forces. I wonder why it wasn’t a complete buy-out…perhaps the investors, including Expedia, want to take the company public. Expedia, according to the report, retains the right of increasing its stake in TravelGuru.
Others in the online travel space include market leader MakeMyTrip.com, which has announced that it intends to go for an IPO, and has investments from Tiger Fund, SAIF Partners, Helion Venture Partners, Sierra Ventures; Cleartrip (KPCB, Sherpalo Ventures, DFJ, Mahindra & Mahindra Group), Yatra (funding from Reliance Capital, Network18 and Norwest Venture Partners), and Via (funding from NEA Indo-US Ventures). BCCL has private treaty investments in TravelChacha.com, TravelMasti.com, HolidayIQ.com. There are also meta aggregators like ezeego1(Cox&Kings), Zoomtra (Smile Interactive) and Ixigo (BAF Spectrum).