Gurugram-headquartered Yatra has acquired corporate travel service provider Air Travel Bureau (ATB) for an undisclosed amount. The acquisition strengthens Yatra’s presence in India’s burgeoning corporate travel sector.
The deal, which has already received the approval of the Board of Directors of both companies, will take place through Yatra Online Inc.’s subsidiary Yatra Online Pvt. Ltd.
The details of the transaction were made public during a conference call earlier today.
Commenting on the new partnership, Yatra Online co-founder and CEO Dhruv Shringi said, “We believe that as a combined entity, we are now the largest corporate travel services platform in India by gross bookings. This acquisition will allow us to deliver a best-in-class experiences to an even wider set of travellers, through our web and mobile app platforms and enhance our reach to cross-sell our entire product suite, including hotels, to this customer base.”
As part of the deal, Yatra will be taking over all of ATB’s outstanding shares and debt. The first part of the transaction will be closed by mid-August 2017. The second phase will reportedly be concluded by the second quarter of 2018.
Air Travel Bureau (ATB) is a partner in the UNIGLOBE network. It is a corporate travel service provider established in 1962. It currently operates in operates in eight locations in India including Delhi, Bengaluru, Chennai, Gurugram, Hyderabad, Kolkata, Mumbai, and Pune. It has a workforce of more than 700 employees, and claims to have a client base consisting of 400 large and medium-sized businesses.
As per an official statement, the company claims to generate gross bookings worth $232 Mn (INR 1,500 Cr) every year. Commenting on the acquisition, Chairman and CEO of ATB, Sunil Narain added, “ATB has built a very strong presence over the last 30 years in the corporate travel space. We’re excited for ATB to join the Yatra family and for our teams to work together to further enhance the offerings we provide to our customers and partners by leveraging Yatra’s technology platform and large hotel network.”
What Yatra Has Been Up To
Founded in August 2006 by Sabina Chopra, Manish Amin, and Dhruv Shringi, Gurugram-based online travel portal Yatra currently claims to have tie-ups with over 65,000 hotels in India and nearly 500,000 hotels across the globe. The 11-year-old company is backed by IDG Ventures, Vertex Venture Management, Norwest Venture Partners, and other investors.
Despite rising losses, Yatra has made a string of acquisitions geared towards growth and expansion. These include Travelguru, Travel-Logs, WhatsApp-based concierge app Dudegenie and Bengaluru-based auto rickshaw aggregator MGaadi. In July 2016, Yatra signed a reverse merger agreement with NASDAQ-listed firm Terrapin 3 Acquisition Corp (TRTL).
Following the move, Yatra started trading on NASDAQ, a global electronic marketplace for buying and selling securities. In October 2016, it also offered Reliance Industries a small equity stake in the company. As part of the deal, Reliance agreed to pre-install Yatra’s hotel and flight discovery app on all its Lyf 4G phones.
In July 2017, Bennett Coleman & Co. Ltd (BCCL) reportedly exited from its investment in the online travel portal. The equity-convertible warrants were sold for about $6 Mn (INR 39 Cr), according to Yatra’s annual report for FY ’17.
Fundings In The Indian Online Travel Sector
The country’s travel market (both offline and online) is expected to become a $48 Bn industry within the next three years, according to a Google India-BCG report. As per an IBEF report, the online travel space will likely account for 40% to 50% of total transactions by 2020. Among Yatra’s competitors are MakeMyTrip, Ibibo Group, ixigo and others. In May 2017, MakeMyTrip raised $330 Mn Naspers and Ctrip as well as other investors.
Earlier in March, Gurugram-based ixigo secured $15 Mn in Series B round of funding led by Sequoia Capital. During the same period, Bengaluru-based WanderTrails obtained $1 Mn Seed funding from Earlsfield Capital. In October 2016, travel discovery platform YuMiGo raised $300K in angel funding. In the same month, adventure travel startup Deyor Camps secured $500K funding from Udaan Angels and others.
The ATB acquisition will likely increase Yatra’s reach in the corporate travel market. Because the company has been battling losses upwards of $94.99 Mn (during 2016-17), how the latest acquisition will affect Yatra’s predicament is something that remains to be seen.