Yatra.com raises US$23M; Singapore based Vertex Venture lead investor
Besides strengthening its position in the market, Indian travel portal Yatra.com will utilise the funds in mobile technologyBy Twishy Shahi 16 Apr, 2014
Yatra.com, India’s one of the leading online travel websites, has raised $23 million in funding led by new investors IDG Ventures and Vertex Venture Management. This move validates the rise of investor confidence in the Indian e-commerce space. Yatra’s existing investors, including seed investor Norwest Venture Partners (NVP), also participated in this round.
The fresh capital will be used to accelerate the company’s growth plans by enabling Yatra to strengthen its position in the domestic hotels and holidays business, strategically invest in mobile technology, and strengthen its position as a market leading brand in the online travel industry.
Sudhir Sethi, Founder, Chairman and Managing Director of IDG Ventures India Advisors, said, “The investment in Yatra represents our Fund II’s strategy of selective growth investments in market leading technology companies. Driven by Dhruv’s (Dhruv Shringi, Co-founder & CEO, Yatra.com) exceptional leadership, the company has achieved market leadership in the domestic hotels and packages segment. This is a highly experienced and cohesive team that has demonstrated an outstanding track record and shown continued growth in the expanding online travel market in India. We are delighted to lead this round in Yatra and partner with the existing investors.”
Joo Hock Chua, Managing Director & Chief Investment Officer of Vertex Venture Management added, “Vertex’s investment thesis is to invest in great companies and build them into champions. Yatra is such a company with a trusted name and a dominant position in the domestic travel industry, helmed by a strong management team under the leadership of Dhruv. We are happy to join this strong investor group and be part of the winning team that will contribute to the ongoing success of Yatra.”
On the funding, Dhruv Shringi, Co-founder and CEO of Yatra.com, said, “Over the years Yatra.com has witnessed consistent growth and has created a strong brand for itself in the industry. We are focused on expanding our reach in the market and further diversifying our business by growing the hotels and holiday packages business. This new investment will enable us to enhance our mobile technology, and also strengthen our execution capabilities.”
The Bollywood star Salman Khan is also the brand ambassador and stakeholder in Yatra.com. He has been a part of the company’s marketing campaign for the past few years building a stronger equity.
Promod Haque, Senior Managing Partner, Norwest Venture Partners (NVP) said, “NVP has continued to increase its investment in Yatra.com since 2006 when the company was founded. We are pleased to have witnessed the business go from a position of strength to a dominant player in the Indian market. The strength of Yatra.com’s management team combined with the company’s unparalleled focus on creating compelling value propositions for Indian travellers is the reason why we continue to back Yatra and believe so strongly in this growing sector.”
There has been a rising investor interest in the Indian e-commerce space and recently, the online marketplace Snapdeal, raised $134 million led by eBay, the online retailer, Flipkart also received fresh funding of $160 million mostly from new investors taking the total to $360 million and Quikr, the online and mobile classifieds player raised $90 million from investors. The investors are bullish on the Indian market because of the growing penetration of internet even in smaller towns enabling buyers to have access to multiple online offerings.
It is interesting to note that India is adding four million internet users every month and almost 100 per cent of them access the internet on mobile. Hence, the rise in the purchasing power and rapid adoption of smartphones in India is adding to the momentum.
According to a joint report of KPMG and Internet and Mobile Association of India (IAMAI), the size of India’s e-commerce market in 2013 was around $13 billion and the online travel segment contributed over 70 percent of the total consumer e-commerce transactions.
The travel portals and classifieds have fuelled the growth in the Indian e-commerce space. But now, the market is much more evolved and investors will continue to pump in huge sums of money due to the diversification of the product segment to jewellery, baby products, lenses and many other fashion and lifestyle products. However, in this fiercely competitive scenario, consolidation is the key for growth in the coming years.