Sunday, April 24, 2011

Indian online travel players hit accelerator....again!

The Indian online travel industry seems (in market designed to produce mixed metaphors) to burst in waves. Back in 2008- the four leading companies of India - Makemytrip, Cleartrip, Yatra and Travelguru seemed to have created a $2bb plus online travel market from a near standing start.

In their recent India report, PhoCusWright now puts the 2010 online travel market (leisure and un-managed business) at more than double 2008. $4.3bb is their size estimate, as much as 25% of the total travel market. They predict a rise to $7bb in 2012 (you can buy the report here). That would put the India of 2012 at the same size as the online market of Australia in 2010. An almost unrivaled acceleration in online travel. Like many markets online, the buying of low cost carrier tickets is a huge driver. But, unlike many markets, rail is a significant part of the grow story in India. Online rail in India is already more than a $1bb a year and is more than a quarter of the online travel industry's total turnover. In India (according to PhoCusWright), the percentage of rail online is twice the percentage of hotel online.

Corporate activity is accelerating alongside the market acceleration.

Number one player MakeMyTrip (MMYT) has been public for less than a year (IPO in August 2010). They went to the market at $14 and are still trading above $30 (Apr 21 at $32.23) with a valuation in excess of $1.1bb.

Cleartrip is chasing hard. They have just raised $40 mm from travel travel expense and management solution provider Concur (you remember them, they bought TripIt in Feb for up to $120mm).

Not to be left out, a day later Yatra announced they were raising $45mm from raised from Valiant Capital Management, Norwest Venture Partners, Intel Capital and others (WSJ story here). According to the WSJ this eclipes the $33.8mm they raised in the last round. The article quotes sources saying that a float in the next 12-18 months is very likely.

Expedia is also refusing to be left out. They have added India to their list of markets covered by their JV announced with Asian low cost carrier giant Air Asia.

Via is trying to argue there is room for more players. With $15mm raised so fare from NEA Indo-US Ventures, Sequoia Capital India and others, Via (also known as Flightraja) has mega bucks in their sites announcing last month they intend (emphasis on intend) to raise another $100mm.

Travelocity are trying to peek their head above the noise through a marketing relationship with Mastercard.

A very busy 30 days in a fast growing market. Did I miss anything? For the Tnooz latest list of top travel sites in India care of Hitwise click here.

Thanks to FriskoDude for the great photo via flickr


steve sherlock said...

gold rush like, and i'd say 'there is gold in them hills...'

any idea what the headcounts are?

i heard some incredible numbers, in the thousands for mmt and yatra alone..

James Brickman said...

Many travel related sites are getting lot of profit from the internet business. Like many markets online, the buying of low cost carrier tickets is a huge driver. But, unlike many markets, rail is a significant part of the grow story in many countries.

Anonymous said...

Very interesting, thanks for the update Tim.

However, based on the numbers you quote, I find it surprising that the Indian market seems so much smaller than that of China - given that the population numbers aren't so far apart.

Based on a BCG report I recently read(see the Chinese travel market in 2010 was worth around US$225 billion!

Also CTRP has market cap of US$7 billion versus MMYT US$1 billion.

What gives?

Tim Hughes said...

@Steve - have not heard any head count numbers. will look around - let me know if you find anything

@Anon - the Indian market is about 5 years behind the China market in terms of online travel player maturity. Ctrip founded/launched in 1999 and floated in 2003. Makemytrip founded in 2005, floated in 2010.

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