Online travel and hotel booking platform, Cleartrip has just raised a fresh round of funding from its existing investors.
US-based Concur Technologies and Gund Investment also took part in the funding round as per an executive at Cleartrip.
Speaking about the funding, the Chief Operating Officer (COO) and President, Samyukth Sridharan stated:
On the funding side we maintain that we have enough capital to run our business for the next couple of years, Our last round was in February-March time frame. It was an internal round, (participated in by) not all existing (investors) but Concur and Gund for sure.
There is a fundamental difference in how some of our competitors are building their business versus ours. We have always believed that being capital-efficient is more important.
In terms of the competition, GoIbibo and MakeMyTrip are two giants that lock horns with Cleartrip in the space of online ticket and hotel booking. There has been a lot of activity in this space particularly in terms of the amount of investment these three major players have received. Earlier in the year GoIbibo, backed by South African media company Naspers Group said that will inject funds of $250mn in the GoIbibo group. MakeMyTrip also raised $180mn from China’s Ctrip.com International Limited in the month of January.
This fresh injection into GoIbibo and MakeMyTrip has been utilized by both the Nasdaq-listed companies to go all out on their holiday package and hotel booking verticals. As the COO of Cleartrip pointed out, while these two businesses are using the capital raised to acquire customers, Cleartrip has always tried to be capital efficient. It will be interesting to see what Cleartrip has in mind in terms of the strategy they would deploy to utilize the funds they have raised.
Interestingly, Cleartrip also launched a new vertical on its app called ‘Local’. The category will allow you to book events, fitness, food and adventure trips. While this might be a good vertical for the business, the competition in this particular space is lethal too.
Activity is probably about half the size of the travel market itself in terms of consumers but it is extremely fragmented. Travel business in India is roughly $6-7 billion.
It will be interesting to see how Cleartrip performs in the local category. The fragmentation will certainly help to engage the right user but the volume and value of the transactions can only be understood after a few months.