Deal Radar 2008: Yatra

Yatra is a travel company which provides availability and booking facilities for air travel, hotels, buses and car rentals worldwide. Besides its strong online presence, Yatra also offers its services through mobile phone and retail mediums. Founded by Dhruv Shringi, Manish Amin and Sabina Chopra in 2006, the company currently is based in 10 cities in India and has 700 employees.

Yatra received its initial funding from Reliance Capital, Norwest Venture Partners and TV18 Group. The value of this round of financing is approximately $5 million, but has not been confirmed by the company.

On Moneycontrol, Dhruv Shringi, CEO, stated that Yatra was expanding rapidly and targeting a total sales of $210 million in 2008. An article in the Financial Express states that the company is currently doing an average sales of Rs 80 crores a month, which is roughly $20 million. This is a huge jump from the previous year’s sales of $5 million a month. (see: contentSutra). In terms of volume, 6,500 air tickets and over 300 hotel rooms are booked on the site daily.

If we assume the same ballpark commission rate as Cleartrip of 1.5%, the projected 2008 revenue comes to around $3.2 million. And assuming a 200% CAGR, we can estimate that Yatra will reach $25-$30 Million in annual revenue by 2010.

The latest news is that Yatra plans to buy the corporate arm of Kuoni, thus gaining access to a large pool of Kuoni’s corporate travel clients.

They also have a planned outlay of Rs 20 million over the next year for their offline retail initiative. Yatra is one of the 3 leaders in an already crowded online travel marketplace in India, but it can take advantage of its strategic investor, Reliance. The strong retail infrastructure via Reliance will help it reach over 5,000 Indian cities and rural areas. These outlets can be used for fulfillment, high-touch customer service and payments.

An article on ThinkingAloud states that Yatra is considering an IPO. At the $30 million annual revenue level, which it will take at least 2 years to reach, an IPO may make sense. However, it doesn’t make a whole lot of sense at the current revenue threshold.

Besides, given the activity level in online travel, there could be many acquirers from travel portals Expedia and Orbitz, to vertical search engine Kayak, and then some. Microsoft has recently acquired Farecast, indicating its interest in the travel vertical.

This segment is a part in the series : Deal Radar 2008