MakeMyTrip raises $330 million in funding
Sources stated that MakeMyTrip has raised $330 in its latest round of funding from a mix of private placement of shares and from issuing fresh stock to investors Ctrip and Naspers. The latest funds will go toward business expansion, technology and product development, working capital and general corporate purposes. MakeMyTrip is attempting to consolidate its position in the Indian travel industry.
Ibibo: Company overview
Ibibo is one of India's largest travel companies, founded by Ashish Kashyap in 2007. The group owns several travel brands including tour aggregator Goibibo.in, redBus.in, YourBus, ibibo Ryde and Travelboutique. The company also holds minority stakes in PayU global. In 2013, Ibibo was voted as one of India's top 5 trusted e-commerce brands. Ibibo has over 3 million daily transactions across its platforms.
MakeMyTrip: Company Overview
MakeMyTrip was founded in 2000 as an online travel company by Deep Kalra. The company "holds close to 25% market share of the OTA hotel booking segment". From its genesis MakeMyTrip acquired Luxury Tours and Travel Private Limited, Ixigo.com, ITC Group, easytobook.com, Inspirock, MyGola, Holiday IQ and Bona Vita Technologies. In 2016, Ctrip - a Chinese travel booking giant invested $180 million in MakeMyTrip.
Ibibo and MakeMyTrip to merge
Online-focused travel groups MakeMyTrip and Ibibo announced their merger plans. The two "agreed to merge in a stock transaction" would create an entity that would control a "fifth of the lucrative airline booking market". The merged business will run as MakeMyTrip. People privy to the details of the deal pegged the transaction value of the deal to approximately $1.8-2 billion.
Details of the deal
MakeMyTrip's founder will function as the CEO and executive chairman, while co-founder Rajesh Magow will be the CEO (India). Ashish Kashyap- Founder and CEO of Ibibo will be MakeMyTrip team's President. South Africa's Naspers and China's Tencent with 40% stake will be the largest shareholders in the entity. 10% stake will belong to Ctrip.
Importance of the merger
India's online travel business has an estimated valuation of $10 billion. Operators can't churn profits due to fierce competition. Ibibo generated $38 million in revenue (2015) it "incurred $40 million in advertising and marketing expenses." MakeMyTrip too recorded losses in last seven quarters because of tremendous marketing costs. With 20% market share in online flight booking, this deal will be a gamechanger for both the players.
MakeMyTrip, ibibo merger cleared by CCI
Documents filed by MakeMyTrip to the US Securities and Exchange Commission show that the Competition Commission of India has approved its acquisition of Ibibo Group. The deal brings all brands under the Ibibo Group such as Goibibo, RedBus, Ryde and Rightstay under MakeMyTrip. In a joint statement the companies said the merger would help them "dominate this highly under-penetrated online Indian travel space."