Travel search engine Ixigo in talks to raise up to $25 million2 min read . Updated: 11 Nov 2014, 07:43 AM IST
CEO Aloke Bajpai says the firm will conclude a transaction by early 2015
Mumbai: Seven-year-old travel search engine Ixigo.com is in talks with a clutch of venture capital funds to raise up to $25 million (around ₹ 155 crore) to fund its expansion plans.
“We’ve built ixigo in a capital-efficient manner, and did not need to raise money for three years, even though we’ve grown six times in the interim," Bajpai said in a phone interview, adding that he expects his company to command a $1 billion valuation by 2017. Bajpai did not disclose ixigo’s current financials, but said the company has grown at a compounded annual growth rate of 120% in the last four years.
Ixigo competes with established rivals like TripAdvisor Llc for travel reviews, Google Inc. for flight searches, KAYAK and Skyscanner Ltd for travel searches, and JustDial for certain travel-related services. However, ixigo is trying to differentiate itself via a multi-app strategy and focus on expanding its mobile platform.
“We are evolving into a mobile travel marketplace where travel suppliers and aggregators, big and small, online and offline, will market and distribute their travel services to travellers. This needs a much bigger team with on-the-ground presence. We want to add more apps to our product mix, and will build a bigger engineering and product team too. This is what most of the funds will be used for," Bajpai, 34, said, adding that ixigo has over 4 million monthly users and has seen over 3.6 million app downloads.
As much as 70% of the company’s traffic now comes from mobile devices.
“With the addition of budget hotels and other travel services suited to middle-class smartphone users, we expect to cross 10 million downloads and 10 million monthly users in 2015," Bajpai said.
Following the investment by SAIF and MakeMyTrip, ixigo had expanded into trip-planning and became a broader travel information site which included destination travel guides, transportation (flights, trains, buses), hotels, holiday packages, car rentals, road trips, restaurants and traveller reviews.
Analysts, however, are sceptical about the revenue model of travel sites.
Nobody has been successful in monetizing travel destination products, according to Ram Badrinathan, founder and CEO of GlobalTHEN, run by Island Education Pvt. Ltd, and travel consultant. “It will be interesting to note how ixigo.com would be doing the same," he said.
Ixigo’s primary sources of revenue are click-throughs to online travel sellers (airlines, hotels, online travel portals), and display advertising on its website and apps. In the future, ixigo will monetize from its software as a service marketing platform for small and mid-sized travel businesses, and will also work with select online travel partners to enable bookings inside its apps, Bajpai added.