Mumbai: Mobile phone maker Micromax Informatics Ltd on Monday said it has made a strategic investment in Ixigo, a mobile travel search firm.

While both the firms did not disclose details of the equity stake involved, a person close to the development said Micromax has picked up a significant minority stake.

“This investment will further reinforce Micromax’s foray into application services after having pioneered democratization of technology by delighting consumers with its affordable and innovative product offerings. It will also give Ixigo a reach of over 30 million incremental users over the next year," the companies said in a joint statement.

Ixigo, founded by Aloke Bajpai and Rajnish Kumar, is run by Le Travenues Technology Pvt. Ltd.

Micromax had last month said it would invest between $500,000 and $20 million in over 20 start-ups in the coming year. For this objective, Micromax has also set up a mergers and acquisitions (M&As) team, which has been actively sourcing and working with start-ups across major technology markets such as the US, Europe, Israel and India to bring in the best products and capabilities.

Rahul Sharma, co-founder, Micromax, said the company is looking forward to working closely with Ixigo to build on-demand and one-click travel experiences for Micromax consumers.

“We will be announcing more such partnerships over the next few months to accelerate our journey into services," Sharma said.

Ixigo aims to provide relevant travel services to the next 300 million smartphone users, and has recently entered the budget hotel, package and cab segments.

It plans to use this investment for expanding its product and technology teams and add 25,000 small- and mid-sized travel service providers to its marketplace offering.

“Ixigo will be deeply embedded in Micromax devices as a core travel and transportation service. This is the future of apps since the closer you get to the device and core user experience, the more the engagement and the better the user experience for the end users," said Bajpai, chief executive officer and co-founder, Ixigo.com.

Bajpai said around 80% of users visit Ixigo’s apps or its website through mobile devices. “Micromax will give us access to a very wide audience base in tier-II and tier-III cities where Ixigo apps have a huge potential," he added.

Bajpai said the company will use the proceeds to build a much bigger product and technology team. “We are building a marketplace with thousands of travel-service providers with whom the middle-class travellers will transact, leveraging the Ixigo platform. Next year, we aim to have 30 million monthly users, up from the 5.5 million monthly users today," he added.

Ixigo.com already competes with established rivals such as TripAdvisor.com for travel reviews, Google.com for flight searches, Kayak.com and Skyscanner.net for travel searches and even JustDial.com.

In 2011, private equity investor SAIF Partners bought a 56.7% stake in Ixigo.com, while online travel booking firm MakeMyTrip Ltd bought 19.9%.

On 11 November 2014, Mint reported that Ixigo.com was in talks with a clutch of venture capital funds to raise up to $25 million to fund its expansion plans.

“By being embedded in one of the leading smartphones in the country, Ixigo gets a jump-start over the other travel companies right out of the box," said Chetan Kapoor, research analyst (Asia-Pacific) at Phocuswright Inc., a tourism and hospitality research firm. “But such tie-ups aren’t new; we’ve seen a few handset manufacturers pre-loading travel applications in the past. However, what makes this partnership stand out is Micromax’s investment theory, which outlines the creation of a mobile services ecosystem, perhaps similar to what we see in China on Weixin (WeChat)," Kapoor added.

In its May report, Goldman Sachs estimated the online travel agency (OTA) market to grow nearly 5X to $40 billion by FY30, from around $8 billion in FY14, implying a 11% compound annual growth rate (CAGR).

The growth is likely to be driven by the shift of travel ticketing from offline to online, with online travel penetration growing from 41% in FY15 to 50% by FY30.

“Depending on the platform’s success, we cannot rule out other travel companies coming on board this—or competing—platforms," Kapoor added.

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