Mumbai: New Delhi-based travel portal Makemytrip.com Pvt. Ltd has got $15 million (Rs59.4 crore) in the third round of funding from US-based hedge fund Tiger Fund and existing investors Softbank Asia Infrastructure Fund (SAIF) Partners, Helion Venture Partners and Sierra Ventures.
The company has plans for an IPO (initial public offering) by 2009 and says its latest investor brings added value to the table, specifically if it decides to list on the US bourses.
“If we were to list in the US, our investors’ experience in the area will help us,” said Rajesh Magow, chief financial officer, Makemytrip.com. Tiger Fund, which led the latest rou-nd of funding, also invests in Internet firms in the US. The online travel sector in India has attracted venture capital investment of close to $80 million in the last two years. But this will be the first IPO by a local Internet firm in this space.
New Delhi-based Info Edge (India) Ltd, which owns job portal Naukri.com and matrimonials site Jeevansaathi.com, listed successfully on the domestic bourses last year, raising Rs174 crore. Info Edge managing director and CEO Sanjeev Bikhchandani is also on the board of Makemytrip.com.
Earlier, Mumbai-based Rediff.com India Ltd and Chennai-based Sify Ltd had listed on the Nasdaq.
The fresh capital will be used for technology investments and to expand the company’s offline presence across the country. To supplement its online booking channels, the travel site has recently set up retail booking offices in metros such as Mumbai, Bangalore, Kolkata and Ahmedabad.
It will open offices in other tier I cities this fiscal.
Makemytrip makes money from commissions on online travel bookings from its operations in India and the US. Of its $22 million commission revenue, close to $16 million comes from its India business.
Set up in 2000 to offer online travel bookings for the niche India-US non-resident Indian market, the company began catering to the local market only in 2005. “The domestic Internet market wasn’t big at the time they began, so they initially focused on the US,” says Sandeep Singhal, director, Nexus India Capital. Singhal was a partner with the Rupert Murdoch-backed venture capital firm eVentures India, which incubated Makemytrip.com with $1 million in seed capital. eVentures sold its stake back to the promoters two years ago.
The firm has raised $39 million in venture capital since inception. While refusing to divulge how much of this is available for future expansion, Magow said: “There was enough cash in the bank before this round of funding.” After eVentures’ exit, the portal has raised $10 million in 2005 from SAIF Partners when it launched its India operations. The capital was used for expansion and brand building. Then in late 2006, it raised $13 million from Helion Venture Partners, Sierra Ventures and SAIF Partners.