For Cleartrip, it has been difficult because its primary focus is on airline travel less on hotel bookings. The company has laid off close to 500 employees in the thick of the pandemic last year when the travel industry was shut almost completely.
The Flipkart-Cleartrip deal is likely to value Cleartrip at around $40 million in what is a distress sale for one of the oldest players in the travel game.
Founded in 2006 by Matthew Spacie, Hrush Bhatt, and Stuart Crighton, Cleartrip was positioned as a travel and hotel booking market. It has been struggling to keep up with bigger competitors, such as GoIbibo and MakeMyTrip, since the past decade. Competition in the sector multiplied multifold when Naspers backed the merger of MakeMyTrip and its portfolio firm GoIbibo in 2016. In 2019, Naspers sold its shares in the joint entity to an existing investor in MakeMyTrip called China’s Ctrip and exited the industry altogether.
For Cleartrip, it has been difficult because its primary focus is on airline travel less on hotel bookings. The company has laid off close to 500 employees in the thick of the pandemic last year when the travel industry was shut almost completely. In FY20, Cleartrip’s revenue stood at INR 318 crores and losses at INR 14 crores. Flipkart intends to retain the management and staff and continue the Cleartrip brand independently, according to a person cited earlier. Cleartrip’s backend engine will start to power Flipkart’s hotel and travel bookings.
Flipkart and its rival Amazon, both e-commerce majors, have over time forged partnerships with companies in sectors outside their purview. Flipkart had earlier struck a partnership with Ixigo and later announced a similar tie-up with MakeMyTrip. In October, it picked up a 27% stake in Arvind Fashions Ltd.’s subsidiary Arvind Youth Brands, which owns the Flying Machine brand, for Rs 260 crore.
Source: Business World
