Update: on the MakeMyTrip conference call, CEO Deep Kalra said that over time, they will be looking at how they can increase their stake in iXiGO, and “we’ve kept our options open”. They intend to leverage iXiGO to see “how a product would be more engaging, and leverage it essentially for our H&D (Holidays and Deals) business.”
Earlier today: VC Fund SAIF Partners and NASDAQ listed Online Travel Agent (OTA) MakeMyTrip have acquired a majority stake of 76.6% for $18.5 million in online Travel meta search engine iXiGO for a total cash consideration of $18.5 million. This includes investment and the purchase of shares from existing shareholders of Ixigo. Following this transaction, 56.7% of the company would be held by SAIF Partners, and 19.9% by MakeMyTrip.
Will Other OTAs continue?
Meta search engines operate on a business model different from that of online travel agents (OTAs): MakeMyTrip is an OTA, and earns a commission from each ticket sold, while Ixigo is a meta seach engine that provides leads to websites of airlines, as a part of its marketing budget. It gets paid on a lead generation basis, per booking.
Another difference that we’ve heard of is that while airlines sometimes don’t surface information on special deals that are on offer on their own website to OTAs, meta search engines can provide that information since they are aggregators.
So, one would think that the two businesses are antithetical, but iXiGO has, interestingly, worked with both airlines and OTAs in the past. It currently aggregates Yatra, Travelocity, MakeMyTrip, Expedia and goIbibo. In the past, it has aggregated inventory from Akbar Travels Online and Cleartrip as well.
A question remains: since MakeMyTrip might be seen as a strategic investor by other OTAs, we wonder if OTAs who compete with MakeMyTrip will remain.
In a statement, iXiGO Founder Aloke Bajpai has said that the company intends to expand its product offerings for online travel research & trip-planning, and strengthen its existing relationships with suppliers, online travel agencies, hotel aggregators, advertisers and content partners.
We’ll update from MakeMyTrip’s conference call.