Cleartrip readies platform to raise $50 mn through PEs

Cleartrip, one of the top online travel agencies (OTA) in India, is understood to be readying the platform to raise as much as $50 million through the private equity route. The company has already been backed by some of the blue-chip private equity fund including Kleiner Perkins Caufield & Byers, Sherpalo Ventures, DAG Ventures, Draper Fisher Jurvetson, besides a strategic investment from US-based Concur Technologies.

The company, which oscillates between the second and third position with Yatra.com and market-leader Makemytrip-.com, is understood to be in various stages of appointing an investment banker to start the process. This move by Cleartrip to look at raising fresh resources comes at a time when goibibo.com, another OTA backed by cash-rich Naspers Group of South Africa, is on an overdrive in India and is fast gaining ground. Independent research reports have indicated that the traffic to goibibo.com has been on a sharp upswing. Cleartrip had last raised $40 million during early 2011 from US-based Concur Technologies, which is a provider of integrated travel and expense management solutions for companies.

According e-commerce sector watchers, a consolidation is inevitable in the OTA sector and it is likely that goibibo.com will lead that. They, however, declined to spell out whether Naspers will look at Cleartrip.

A spokesperson for Cleartrip said it continues to have a strong set of investors who are aligned in building the business. "We continue to grow the business, despite a challenging market environment in both our core India and West Asia operations on the back of strong performance, from both our mobile and hotel businesses," he added.

The aspect of e-commerce being actively pursued by the PE majors with a flurry of deals in the recent past is expected to accelerate during 2014 as well, given the growing context of accessing internet over a hand-held device is seeing a high conversion ratio. "In the recent past, players such as Flipkart, Myntra, Quickr, redbus.in saw jaw-dropping valuations from global majors and Cleartrip may just be the next one to raise fund with handsome valuations," another investment banker told Business Standard.

Given the context of the strong growth in the adoption of hand-held devices, Cleartrip has in the recent past been aggressively pursuing that strategy. Now, around 15 per cent of its bookings - out of the daily air transactions of 14,000-15,000 - are through hand-held devices, up from the earlier 5-7 per cent. The OTA gets around four million unique users a month.

THE TRAVEL PITCH

* Set to raise $50 million through the PE route

* May draw good amount of interest as consolidation is inevitable

* Had earlier raised $70 million from Kleiner, Perkins, Caufield & Byers, Sherpalo Ventures, DAG Ventures, Draper Fisher Jurvetson & Concur Technologies

* Cleartrip betting heavily on hand-held devices to drive growth

* Over 15% of bookings are being made on a mobile device against to 5-7% last year