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Mumbai: MakeMyTrip Ltd is in talks with Bengaluru-based holiday information company Leisure and Lifestyle Information Services Pvt. Ltd, which owns and operates online portal HolidayIQ.com, for a nearly $30 million investment, said two people familiar with the development.

The move is in keeping with the company’s articulated strategy of buying out or acquiring stakes in travel-related start-ups in South-East Asia.

“The investment is expected in a month’s time," said the first person mentioned above, who asked not to be identified.

Mint reported on 27 April that the Nasdaq-listed online travel agency, with a market cap of $793 million (as on 10 June), is looking at buying out early-stage start-ups in the travel space.

Last September, MakeMyTrip set up an innovation fund of $15 million to invest in start-ups. In January this year, it bought a 25% stake in Bengaluru-based digital hotel marketing solutions firm Simplotel, using money from the innovation fund.

Following that deal, in April it acquired the assets of intuitive travel planning website Mygola.com.

Between 2011 and 2014, MakeMyTrip either completely bought out or acquired stakes in five companies in South-East Asia and India. For the year ending 31 March 2015, MakeMyTrip reported revenue of $299 million.

In an emailed response, MakeMyTrip said it does not comment on speculation.

HolidayIQ did not respond to an e-mail seeking comment.

In a telephonic interaction on 1 June, Hari Nair, founder of HolidayIQ, denied that MakeMyTrip was investing in the company, but confirmed that the firm is going to raise capital by the end of the third quarter of this financial year.

Nair said the company is looking to improve its existing technology and increase offerings, including content, in the cities where it is currently present.

According to data from the registrar of companies (RoC), Leisure and Lifestyle Information Services is 99.99% owned by Holiday IQ Pte. Ltd, which is registered in Singapore. Till date, the company has raised four rounds of capital. The travel content website is backed by global investment firms Tiger Global Management and Accel Partners. Both investors invested a total of $5.5 million in the company in 2013.

Just last month, HolidayIQ acquired software developer SourceN’s travel mobile development team in an attempt to boost its mobile capabilities. According to RoC data, HolidayIQ posted revenue of 8.04 crore in the year ending March 2014, compared with 4.62 crore the previous year, registering a growth of 74%.

“As online air and rail bookings approach maturity, intermediaries are going deeper and wider across segments to find new growth opportunities such as hotels and packages. Over the last decade, transaction-based online travel companies have managed to get the most attention from investors, but companies also realize the value of content and information at the top of the funnel. Indian online travel companies founded since 2005 have collectively raised over $700 million till date," said Chetan Kapoor, research analyst at Phocuswright, a tourism and hospitality research firm.

That investors are more keen to invest in the online travel segment is clear from the fact that since January, four start-ups have managed to raise nearly $54.05 million, according to data from VCCEdge, the financial research platform of VCCircle.

In March, Oravel Stays Pvt. Ltd raised $24.05 million from Greenoaks Capital Partners Llc, Sequoia Capital India IV Ltd and Lightspeed Venture Partners IX Lp, the data stated.

“The early players in the e-commerce space in India have been the companies that dabbled in the travel space and they have been highly successful. As the average travel spend of the Indian consumer increases, these larger online travel companies are looking to invest in companies which complement their existing business model," said Raja Lahiri, partner at Grant Thornton India.

pooja.s1@livemint.com

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