Here's What Helped These Travel-based Startups Raise Funds this Year
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Today travel is not just done for leisure or work, it’s also done as a regular regime by the floating population of the country. People are always on the move, whether it’s heading home for a long weekend or covering multiple locations at work.
To ease out things for frequent and occasional travellers, there are a number of innovative products launched in the market; that include hotel booking portals, ticket booking platforms, holiday packages and more.
This year copy-cat models of successful ideas and ecommerce have seen a dip in funding but there was a lot of chatter and buzz around the travel space.
"According to Tracxn data, first half of the year saw $457.67 million in funding versus $75.4 million during the same period in 2015 for travel-based startups"
While not all startups have managed to do the same, we asked three entrepreneurs as to what it took them to raise the new round of funds this year.
Treebo Group of Hotels, the Bengaluru-based technology-enabled chain of budget hotels, raised Rs 112 Crore in Series B funding round led by Bertelsmann India Investments (BII). The round also saw participation of existing investors, SAIF Partners and Matrix Partners India.
Co-founder Sidharth Gupta said that the travel market in the country is huge and investors are already comforted by this. “In addition, they (investors) look for solid business model that genuinely adds value to the customer's life, and they look for a solid team that is capable of executing this business model,” he said.
TravelYaari, an online bus booking platform, raised $7 million Series B funding from Gujarat Venture Finance Limited (GVFL), Bennett Coleman & Co Ltd and other investors. Founder Aurvind Lama said it’s the robustness of the business and the returns we can give them.
I think the track record, business model and team helps one achieve investors’ trust, he said. Lama, who had started TravelYaari in Ahmedabad initially, said he doesn’t see any slowdown in the travel space as people don’t have any inhibitions today to stay on the move.
GoFro, started by former Snapdeal CTO, is an online marketplace for travel. Founded by Amitabh Mishra, the company received $5 million in funds from MakeMyTrip this year.
“The ticket size in our business is big. There’s got to be a great deal of trust that we need to build. So the average ticket size on our platform is Rs. 1 lakh. We try to make our customers happy so that they would spread the word and we have a lot of referral clients. We have to be very customer focussed, unlike product commerce where one would buy on an average every one or two months,” Mishra said.
Apart from enabling holiday bookings, through its Companion app, GoFro ensures that the customer has in-destination support, and provides assistance on any issue that may arise during a holiday.