Image Credits: Forbes
SUMMARY
Rategain is raising $15 Mn in funding in the current round
The fundraise will help the company fuel its expansion plans
Last year, the company appointed Harmeet Singh as its new CEO, while Bhanu Chopra was elevated as Chairman
Travel and hospitality SaaS startup RateGain is looking to raise close to $15 Mn from Avataar Venture Partners.
According to the Ministry of Corporate Affairs filings accessed by Inc42, the company may issue 21,269 cumulative convertible preference shares (CCPS) at $235.08 per share to Avataar Venture Partners I, aggregating to a total of nearly $4.99 Mn in the first tranche. In the second tranche, the company is looking to issue a further 42,539 CCPS at the same rate to the same fund, amounting to around $9.99 Mn. The filings said that the funds would help the company in its expansion plans.
Launched last year by Norwest Venture Partners India, Mohan Kumar and Freshworks former COO Nishant Rao, Bengaluru-headquartered Avataar Venture Partners invests in growth-stage B2B and SaaS startups.
Pay Cuts & Furloughs
The proposed fundraise from Avataar Venture Partners comes four months after RateGain had initiated pay cuts and furloughs for several employees due to the financial crisis caused by the Covid-19 pandemic and the resultant lockdown, which severely impacted the travel industry.
The pay cuts and furloughs were confirmed by RateGain in a statement to Inc42. The company said that the major brunt of the pay cuts was borne by the management team, which had apparently taken 50%-100% pay cuts.
RateGain’s Solutions For Travel & Hospitality Companies
Founded in 2004 by Bhanu Chopra, RateGain offers a SaaS product targetted at travel and hospitality companies to help them streamline operations and sales. The startup enables these businesses to determine the right pricing for their products based on the demand, the current market rates and more to help hotels and booking agents maximise revenue. It also helps hospitality businesses reach more customers by increasing the distribution points by syndicating booking across platforms and provides companies marketing insights from various social media channels to boost conversions.
RateGain influences pricing decisions based on what competitors or other hotels in the vicinity are charging. It also provides hotels information on what people are saying about their property or concept online. It breaks down market rate, OTA ranks and pricing strategy into logical insights. And finally, once the pricing is set, RateGain’s distribution partners bring the hotel products to online ticketing platforms. Prior to this round, the company had raised $50 Mn in 2015 from TA Associates and was valued at INR 1,000 Cr. In the last few years, RateGain has acquired two startups — US-based DHISCO and BCV.
Last year, the company appointed Harmeet Singh as its new CEO, while Bhanu Chopra was elevated as Chairman.
Considering that pandemic brought the travel and hospitality industry to a standstill, RateGain had said that most of its customers, competitors and suppliers were in survival mode from March onwards. The hospitality brands and OTAs associated with RateGain include Leela Hotels, Makemytrip, OYO, RedDoorz, Lufthansa, Finnair Holidays and Bangkok Airways, among others. In October last year, RateGain had claimed a robust growth of 60% y-o-y in terms of the annual revenue and said it was on track to cross $100 Mn in revenue for 2020.
