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| Edited By: Ashish K Tiwari |Source: DNA |Updated: Mar 16, 2018, 05:34 AM IST
Travelocity Global, the US based online travel firm, has acquired Travelguru, one of India’s largest online hotel distribution networks, for an undisclosed sum.
Industry sources, who termed the deal as a distressed sale, pegged the acquisition size at between Rs 45 crore and Rs 50 crore.
Travelocity Global said that the Travelguru will remain a separate entity with co-founder and CEO Ashwin Damera continuing to head its operations.
Travelguru between its three offices in Mumbai, Delhi and Bangalore employs close to 150 people.
Roshan Mendis, regional vice-president of Travelocity Asia Pacific, said the acquisition will complement the company’s online business and help it access more than 4,000 hotels in India.
Industry sources told DNA that Travelguru has been in the red for quite sometime and Damera had been trying hard to find a buyer for over a year now, reaching out to the likes of expedia.com, makemytrip.com and Cox & Kings.
“The valuation expectations were too high hence the deal was rejected by most of them. I believe Travelocity grabbed it pretty cheap and the deal size is well within $10 million, or Rs 45-50 crore,” the source said.
Travelguru since its inception in 2005 has received two rounds of venture capital funding. It raised $25 million in 2006 — $10 million from Sequoia Capital India, which the latter followed up with a $15 million co-investment with Battery Venture.
In 2007, Travelguru acquired travel portal, desiya.com, reportedly for $25 million in 2007.
Besides Travelguru, Cox & Kings’s online travel portel www.ezeego1.com had acquired a majority stake in Forever Travel Distribution Pvt Ltd (FTD) that owns the B2B travel portal, eToursonline.
Deep Kalra, founder and CEO of Makemytrip, is of the opinion that Indian online travel space still offers a lot of organic growth opportunities. Makemytrip claims to have grown 88%, and despite slowdown the management is optimistic on registering 60-70% growth this year. On the possibility of inorganic growth, Kalra said, “We are open to the idea but only at right valuations.”
Growing at 15-25% annually, the overall travel market in India is expected to reach
$11 billion by 2012, with the online travel industry expected to chip in close to $2.5 billion.
Airlines contributes a significant portion to the revenues of online travel agents followed by hotels and other streams.
