 "Travel start-ups ride the fund-raising wave")
Last week, Robert De'Silva from Sri Lanka was on a business trip here. He had a spare day and wanted to see the city. He shared his plans with Trip38, a travel start-up, which was able to suggest key attractions, their opening and closing times and ticket prices - information that would have taken him a lot of time to find on his own. De'Silva later found another start-up, MyGola, which offers this plus helps you book a cab or a table at a restaurant in the city.
Travellers such as De'Silva are discovering a clutch of travel start-ups - TripHobo, Tripoto, Mygola, and Trip38 - offering travel research, planning and local guides for destinations customised for each traveller. The past six months have seen many of these raising money from venture funds. "What we are seeing now is Travel 3.0, driven by mobile which is taking over as users' choice of interface, while the geo-location feature allows you to offer new travel offerings,'' says Nikhil Khattau, managing director of Mayfield, which has backed TripHobo.com. "If offline travel agents were Travel 1.0 and online travel agents like MakeMyTrip offered Travel 2.0, these businesses represent Travel 3.0."
There are enough reasons for investors to be bullish on travel businesses. It is a big market, estimated at $20 billion. Currently, half of air tickets are bought online. "'The habit is already there. Transactions are happening online. Now, the next generation of businesses getting capitalised are the ones bringing more and more verticals online," says Ritesh Banglani, partner, Helion Ventures, which has backed MakeMyTrip, RedBus and TaxiForSure, and Mygola.
Stayzilla, OYO Rooms and ZoRooms are taking budget hotels online. MakeMyTrip recently acquired Mygola. ''It allows MakeMyTrip to acquire users much earlier, at the planning stage, even before a customer is ready to make a transaction,'' says Banglani. Stayzilla has been funded by Nexus Ventures and Matrix Partners, while OYO Rooms is backed by Lightspeed Ventures.
Investors are also bullish because the space has seen exits. Helion has seen four - MakeMyTrip, RedBus, TaxiForSure and MyGola. "Globally, travel has been the leader in e-commerce. With mobile internet, the penetration will only increase in India. Investors are looking beyond ticketing into trip planning and discovery, after booking services," says Niranjan Gupta, chief executive officer of Trip38. He points out how Airbnb and Uber created new categories in the travel space.
Trip38 has been backed by Interglobe Tech Quotient, an arm of Interglobe Enterprises and Singapore-based Lantern Capital. Interglobe is the licencee for Galileo, a travel reservation system used by travel agents. If a traveller shares his ticket and hotel details with Trip38, it can create a travel itinerary for him, and suggest key attractions and optimise his route to minimise commute. It can mail boarding passes, inform the traveller of flight delays or advise them on foreign exchange.
The change in the macro investment scenario, which has increased deal activity, has helped travel start-ups raise money. "The rising tide is lifting boats. Travel is one of these," says Prateek Sharma, founder, MyGola. What explains multiple start-ups for travel research and planning? "No one has solved travel planning, which remains a pain point for users. Investors are hoping one of them will be able to figure it out," says Sharma.
One reason why travel has seen a lot of start-up action over the decade is because people relate to it. "Entrepreneurs in general work on a problem they personally feel about and relate to. Besides, it's a category which needs a lot of work," says Sharma. For instance, Yahoo had a trip planner, which did not do well and nor were many of its users were aware of. Yet, it continued with it as some of the smartest Yahoo engineers wanted to work for this product, and it attracted a lot of talent.
Travellers such as De'Silva are discovering a clutch of travel start-ups - TripHobo, Tripoto, Mygola, and Trip38 - offering travel research, planning and local guides for destinations customised for each traveller. The past six months have seen many of these raising money from venture funds. "What we are seeing now is Travel 3.0, driven by mobile which is taking over as users' choice of interface, while the geo-location feature allows you to offer new travel offerings,'' says Nikhil Khattau, managing director of Mayfield, which has backed TripHobo.com. "If offline travel agents were Travel 1.0 and online travel agents like MakeMyTrip offered Travel 2.0, these businesses represent Travel 3.0."
There are enough reasons for investors to be bullish on travel businesses. It is a big market, estimated at $20 billion. Currently, half of air tickets are bought online. "'The habit is already there. Transactions are happening online. Now, the next generation of businesses getting capitalised are the ones bringing more and more verticals online," says Ritesh Banglani, partner, Helion Ventures, which has backed MakeMyTrip, RedBus and TaxiForSure, and Mygola.
Stayzilla, OYO Rooms and ZoRooms are taking budget hotels online. MakeMyTrip recently acquired Mygola. ''It allows MakeMyTrip to acquire users much earlier, at the planning stage, even before a customer is ready to make a transaction,'' says Banglani. Stayzilla has been funded by Nexus Ventures and Matrix Partners, while OYO Rooms is backed by Lightspeed Ventures.
Investors are also bullish because the space has seen exits. Helion has seen four - MakeMyTrip, RedBus, TaxiForSure and MyGola. "Globally, travel has been the leader in e-commerce. With mobile internet, the penetration will only increase in India. Investors are looking beyond ticketing into trip planning and discovery, after booking services," says Niranjan Gupta, chief executive officer of Trip38. He points out how Airbnb and Uber created new categories in the travel space.
Trip38 has been backed by Interglobe Tech Quotient, an arm of Interglobe Enterprises and Singapore-based Lantern Capital. Interglobe is the licencee for Galileo, a travel reservation system used by travel agents. If a traveller shares his ticket and hotel details with Trip38, it can create a travel itinerary for him, and suggest key attractions and optimise his route to minimise commute. It can mail boarding passes, inform the traveller of flight delays or advise them on foreign exchange.
The change in the macro investment scenario, which has increased deal activity, has helped travel start-ups raise money. "The rising tide is lifting boats. Travel is one of these," says Prateek Sharma, founder, MyGola. What explains multiple start-ups for travel research and planning? "No one has solved travel planning, which remains a pain point for users. Investors are hoping one of them will be able to figure it out," says Sharma.
One reason why travel has seen a lot of start-up action over the decade is because people relate to it. "Entrepreneurs in general work on a problem they personally feel about and relate to. Besides, it's a category which needs a lot of work," says Sharma. For instance, Yahoo had a trip planner, which did not do well and nor were many of its users were aware of. Yet, it continued with it as some of the smartest Yahoo engineers wanted to work for this product, and it attracted a lot of talent.