Micromax buys stake in ixigo as part of its services ecosystem

Company spokesperson says deal was a step to becoming a service provider from merely a handset maker

Online travel service provider Ixigo will issue fresh shares to Micromax Informatics, India’s second largest mobile handset manufacturer by market share, for an undisclosed amount.

A company spokesperson said the deal was another step by Micromax to becoming a service provider from merely a handset maker.

Micromax had earlier invested in Bengaluru-based HealthifyMe and another analytics firm for undisclosed amounts and equities.

Kumar Shah, head of strategy, Micromax, said the company was considering investment options in education, security, music and gaming start-ups in India and abroad. Ixigo provides information on various modes of travel apart from serving planned trips. It aims to provide travel services to the next 300 million smartphone users.

“Our vision is to integrate services into smart devices that are valuable for our users. We look forward to working closely with Ixigo for on-demand one-click travel experiences for Micromax consumers,” said Rahul Sharma, co-founder, Micromax. “We will announce more partnerships over the next few months to accelerate our journey into services,” he added.

“The partnership with Micromax will strengthen our leadership in mobile travel services for middle-class users. We expect to quadruple our mobile user base in the next 12 months,” said Aloke Bajpai, chief executive and co-founder, Ixigo.

According to him, although ixigo will be focusing on mobile app, it will not withdraw the website after the deal. Ixigo expects to benefit by penetrating in to the Tier-II and -III markets.

“We have an exclusive strategic partnership with Micromax for their travel vertical and if any other company wants to tie up, it has to integrate its application with ixigo,” he added.

The deal is expected to increase Ixigo’s mobile user base by at least five times or, 30 million, over the next year. Micromax will benefit from increased transactions on Ixigo.

Micromax would be entitled to an observer’s seat on Ixigo’s board, Bajpai said.

“Micromax’s investment strategy outlines creation of a mobile services ecosystem similar to that of Weixin (WeChat) in China, which is a force to reckon with in mobile commerce in that country,” said Chetan Kapoor, research analyst, Phocuswright. Micromax announced last month it would invest $0.5-20 million in 20 start-ups in the coming year. The company’s merger & acquisition team is working with start-ups in the Silicon Valley, Europe, Israel and India.