TravelGuru Sells Out To Expedia For 17 Million $ - Finally Some Travel Consolidation!
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Update: Travelguru Founder has denied the story but speculation still exists and now the valuation is being pegged at 75 million $ and acquisition at a higher amount!
Earlier Posted:The travel scene has been an overcrowded one and we have been blogging about both the amount of funding and the number of funded players since quite sometime now. We had even done a story on cleartrip securing more funding than required and expedia launching in India. There was also a chart (given below) which showed how much which player had got funded. But now its time for some consolidation in this space and for foreign players to come in and buy some Indian companies.
So Makemytrip might have been the one that stated that they are the expedia of India and one would have expected expedia to look at them for a buyout but it turns out that Travelguru is the one which seems to have been bought out first. Travelguru which started out as a air ticketing portal and later transformed into hotels booking as its major focus has sold a majority stake to expedia according to this story on VCCircle.
If Travelguru was acquired at 17 Million $ then the proposed valuation for the first must be pegged at 30 Million $ and given the fact that investors given the fact that they were funded for 25 million $’s its only fair to say that it seems that the investors may not have made much on the deal. With regards to funding itself it seems travelguru might have used most of it to buy out a player like desiya.in which it bought for 25 Million $. At the time of the buyout of Desiya Travelguru expected to double its turnover to 42 million $ for year end 08. Dont know if that happened. And if it did the valuation for the buyout does seem a little low. I guess its got more to do with the competition pressure then which has led to this sellout by the founders/investors of travelguru.
All in all these are good signs for the Indian travel space which was getting pretty overcrowded. Im sure looking at this move by expedia Indian players may consider mergers as an option as well to combine strengths. Also other international companies may look at further acquisitions in India as well.
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isnt that pretty low, considering so many startups keep getting $ 10 million funding figures every now and then ?
Interestingly, VCCircle now says the valuation could be around USD 75 million..
http://www.vccircle.com/2008/06/30/exclusive-travelguru-sells-majority-stake-to-expedia-for-17-million/
I guess its better to wait for Travelguru to make an official statement rather than believe such hearsay figures (though the new figure of USD 75 million looks a bit closer to the mark)..