Gurugram-based travel and ticket booking platform, Yatra Online, has entered into a mutual confidentiality agreement with US-based software company Ebix so that the parties can begin due diligence and Yatra can further review and consider Ebix’s proposal.
In an official blog post, the travel company has noted that there is no assurance that a transaction will take place from this process. On March 11, Ebix had offered an acquisition deal worth for $336 Mn (INR 2,342 Cr) in a cash-and-stock deal to Yatra.
In a letter, the software company had mentioned its wish to acquire 100% of the outstanding stock of Yatra Online for $7 (INR 487) per share on a debt-free basis. With this, Ebix intends to merge Yatra with its Indian subsidiary EbixCash.
Following the proposal, Yatra had said that the company’s board of directors will review and consider the proposal to determine the future course of action.
Ebix has been Indian online travel space This is not the first acquisition deal for Ebix in the online travel segment. In 2017, it acquired Bengaluru-based omnichannel online travel and assisted ecommerce exchange, Via.com.
This initiative comes at a time when funding in the online travel sector reached $1.19 Bn across 23 deals, up from $796 Mn in 2017, according to Inc42 DataLabs.
Yatra’s Growth Story
Yatra was founded in August 2006 by Sabina Chopra, Manish Amin, and Dhruv Shringi. The company offers travel-related services such as domestic and international air ticketing, hotel booking, homestays, holiday packages, bus ticketing, rail ticketing, activities, attractions and ancillary services.
Last year, the company had said that it plans to raise $100 Mn capital in the next three years. In 2016, Yatra had also begun trading on NASDAQ.
The company announced its financial results for the third quarter of FY19 last month. It reported a 7% improvement in its quarterly revenue and a nearly 60% yearly control on its losses.
According to the company, it is progressing towards its aim of breakeven EBITDA as it improved its revenue from operations by 48% and controlled EBITDA loss by 60.3%, reaching $2.2 Mn (INR 15.3 Cr).
Traveltech Industry In India
According to a 2019 report by Statista, the revenue generated from the online travel booking segment in India is expected to show an annual growth rate (CAGR 2019-2023) of 9.9%, resulting in a market volume of $11.7 Bn by 2023.
Some of the players such as MakeMyTrip, ixigo, TravelTriangle, YuMiGo, HolidayIQ, ClearTrip, and Expedia are currently looking to dominate the market.
The Indian travel industry has also been attracting foreign investors. This week, Mumbai-headquartered travel technology company Guiddoo raised an undisclosed amount of funding from New Jersey-based global venture capital firm SOSV and Artesian China Fund.
India’s fintech giant Paytm also acquired last-minute hotel booking app, NightStay in January for an undisclosed amount.