How This Holiday Package Aggregator Raised INR 3.2 Cr to Stand Out in a Crowded Sector Online Travel management, being a sector witnessing cut-throat competition is now doing well in terms of raising quality investments.
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In a crowded marketplace that continues to witness the advent of travel management, planning startups by the dozen; not all of these manage to strike the right chords as far as raising quality investments and getting mentored is concerned. Now, in a fairly recent development, a holiday package aggregator has connected with investors and raised INR 3.2 crores from investors comprising of GEMS Advisory, Alok Mittal, Sachin Bhatia, Anita Gupta, and others.
This online holiday packages aggregator, Tripshelf, is founded by Sukhmani Singh, Jai Raj Gupta, and Dhruv Raj Gupta. The venture has been in existence from the mid of 2016. In a bid to understand the strategies that Tripshelf employed to secure both funding and mentorship from an impressive battery of investors, Entrepreneur India interacted with Dhruv Raj Gupta who believes that right problem-solving models are the way ahead.
Unwavering focus – key to getting funded
"With the latest funding round the startup is aiming to touch a revenue run rate of INR 3 Crores annually and a GTV of approximately INR 50 cr," states Raj Gupta to Entrepreneur India.
The key, for funding, is to have unwavering focus on the direction to be followed and not fall prey to diversions. Raj Gupta states that the founding team at Tripshelf has been clear about their aim which is to serve as an ecosystem for tour operators to transition their business online.
The major problem being solved in this approach is the sheer number of travellers, preferring online modes of managing travel, which the operators can cater to.
"We will provide services across this value chain in taking retailers from the offline to the online world," adds Gupta.
He is also confident that the package demand would continue to increase considering the fact that travel has been a deep market and with leisure tourism showing signs of continued positive upward growth.
As far as investors finding worth in his venture are concerned, the strong value creation in supply and demand sides compelled mentors to on-board Tripshelf and also ensures that the venture's financials are catered to.
"Tripshelf helps its tour operators (sellers) transition from the offline world to the online world using a suite of SAAS applications and even provides financing assistance," summarizes Gupta.
"80 per cent of consumers shopping for travel online surf more than 15 websites before deciding. There is no standard to compare services making it a frustrating task. 50 million travellers in India every year have this pain, which makes this a billion dollar opportunity," explains Raj Gupta about the opportunity that the travel management sector offers to ventures as well as investors.
The Funding economics of Tripshelf
Prior to the latest round of fund raising, which saw INR 3.2 cr being pumped into the venture, Tripshelf had previously raised INR 1.6 cr from GEMS Advisory in 2016.
Technology-driven models are catalysts to fund raising
With today's investors (both angel as well as equity) seeking robust technology-driven models from new ventures, it only becomes imminent to understand how Tripshelf aims to stand out from the cut-throat competition as far as employing well-oiled technology models are concerned. Here, Gupta throws light on two key technology offerings which are Tripshelf Files and the Tripshelf Marketplace.
"Investors are looking for ecosystem defining products that serve as powerful backbone tech for retailers. At the consumer end they are seeking to invest in businesses that can create data pipelines and make meaningful inferences and personalized recommendations for consumers. I believe Tripshelf is offering both to the investors," states Gupta.
A bird's eye view of Tripshelf's technical offerings:
Tripshelf Files: A sales and customer relationship management tool dedicated to holiday package sales to help tour operators efficiently manage their travel leads and move their business online.
Tripshelf Marketplace: A fully functional meta search engine enabling comparison of holiday packages aided by a chatbot to further personalize the client's key requirements.
"Tripshelf is helping the offline markets move online, the tour operator market needs the handholding to help them embrace the online transaction world, and I'm excited to see this pan out," adds Alok Mittal who is amongst the investment partners at the travel package aggregator startup.
Online travel management holds great potential
Gupta expresses optimism about the industry in general when he states that the key to survival in the industry is to achieve positive gross margins.
"They key audience is 25 to 40. If you are providing any service in travel and are gross margin negative, shut down. If you are gross margin positive, stretch yourself and survive the first few years, after which you are bound to be in business forever. Investors like businesses that make money, don't forgo that," advises Gupta.
For the newbies, he recommends to look at laying down proper digital pathways along with focussing on consumer-centric issues.
"I don't think market is looking for only profitability, the greater part of the market is trying to understand how you are going to be critical to a supplier or a customer, so that they are tied to you."