Ahead of its initial public offering later this year, Gurugram-based online travel aggregator ixigo has acquired Hyderabad-based bus ticketing and aggregation platform AbhiBus.
Following the cash and stock deal, the Abhibus team led by its founder Sudhakar Reddy Chirra will join ixigo, and all intellectual property, brands, technology and operations are being transferred to the OTA.
This move comes a day after the ixigo operating company Le Travenues Technology converted itself to a public limited company as it prepares for an IPO.
Founded in 2008 by Sudhakar Reddy Chirra, Abhibus provides end-to-end software and other value-added solutions such as e-ticketing systems, fleet management solutions, vehicle tracking systems, passenger information systems, and logistics management. The company also provides technology solutions to private bus partners and state transport corporations in India. It has also partnered with IRCTC to offer bus tickets to IRCTC users.
This is the travel aggregator’s second acquisition so far in 2021, as the company acquired train booking app Confirmtkt in February 2021. Founded in 2007, ixigo offers travel-related services such as ticket booking, deal discovery, recommendations, airfare predictions & alerts, train delay information, PNR confirmation predictions and fully-automated customer service. Founded by Aloke Bajpai and Rajnish Kumar, the company is backed by affiliates of Sequoia Capital and Elevation Capital among other investors.
With this deal, both parties get access to an even bigger user base in the intercity bus market in India, which was estimated to have a valuation of INR 585 Bn in FY2020. It will pit ixigo directly against MakeMyTrip and Goibibo-owned Redbus. ixigo said AbhiBus was the second largest bus aggregator in India in FY20, selling 26,000 bus tickets per day through its platform.
This deal will help ixigo consolidate its presence in Tier 2/3/4 markets by offering a multi-modal transportation experience across trains, flights and buses to its combined user base of nearly 255 Mn users, as of May 31, 2021.
The travel aggregator is now expected to file its draft red herring prospectus by the end of the month and is targeting a valuation of around $750 Mn – 800Mn. The company is targeting an IPO size of around INR 1,500 Cr – INR 1,800 Cr. The company has joined the bandwagon of startups such as Nykaa, MobiKwik, CarTrade, and Paytm who will be going public this year. This would make ixigo the fourth Indian online travel company to go public after MakeMyTrip, Yatra and EaseMyTrip.
In July, the company also reshuffled its board of directors, appointing six new independent board members – Rajesh Sawhney, founder of Indiamart; Rahul Pandit, veteran in hospitality sector; Frederic Lalonde, founder of Hopper Inc, Shubha Rao Mayya, former VP of ICICI Limited, ICICI Prudential Life; Arun Seth, ex chairman and trustee of Nasscom Foundation, and MP Mall, former chairman and MD of IRCTC.
In addition to all this, ixigo’s busy July also included closing a pre-IPO funding round worth $53 Mn led by Singapore-based sovereign fund GIC along with participation from other investors including InfoEdge, WhiteOak, Bay Capital, Orios Venture Partners, Trifecta Capital and Malabar Investments. Including this round, the company’s total funding to date stands at around $88 Mn.
The Indian online travel market is currently dominated by MMT and Goibibo. According to industry estimates, MMT currently holds 65-70% of India’s online travel market, while the rest, including Yatra, EaseMyTrip, ClearTrip, ixigo and the new entrant Paytm together make up the remaining 30-35% of the industry share.
AbhiBus on the other hand competes with the likes of companies such as Go-MMT’s Redbus, IntrCity, Zingbus, and YoloBus. Recently, Zingbus announced that it had raised INR 44.6 Cr in a funding round led by Info Edge ventures.