India’s leading ecommerce platform Flipkart announced an acquisition of Cleartrip for $40 million. For the uninitiated, Cleartrip is an India-born international travel aggregator company. On Cleartrip users can book flight and train tickets and book hotel reservations to local and international regions. The company is acquired by Walmart backed Flipkart in a cash-cum-stock deal.
According to sources Flipkart will acquire a 100% of Cleartrip’s shares, but Cleartrip will continue to function as a separate brand and will continue to retain all its employees.
After the acquisition, Filpkart CEO Kalyan Krishnamurthy issued a statement saying, “Cleartrip is synonymous with travel for many customers, and as we diversify and look at new areas of growth, this investment will help strengthen our wide range of offerings for customers.”
Cleartrip was founded by Hrush Bhatt, Matthew Spacie, & Stuart Crighton first as a hotel and flight travel aggregator. Over the course of its operation Cleartrip has raised $56.4 million across six rounds of funding. The company has Gund Investment Corporation, DAG Ventures and Concur Technologies Inc as their investors.
However lately, the company has been showing losses. In 2020, the company reported a 2.5% year-on-year loss in its revenue. The company generated revenue of Rs. 318. 9 crores. The company registered an operating income of Rs. 275.3 crores which was a drastic 10% loss before the lockdown. This impacted the operations gravely. Meanwhile the company’s expenses also dropped to 6.8% to Rs. 333 crores.
“Cleartrip has been a pioneer in capitalising on technology to simplify the travel experience for our customers. This product-driven focus has enabled us to become the preferred travel partner of choice for consumers in a wide range of markets in the region.” He further added, “We are delighted to be part of the Flipkart family and are excited about the positive impact this collaboration can have for our customers and the travel industry in general,” said Stuart Crighton, Co-Founder of Cleartrip and CEO.
The acquisition comes at a time of Cleartrip showing losses and hence can be considered a distress sale.
Besides Cleartrip here are some other companies Flipkart has acquired over the years:
Founded by Mukesh Bansal, Ashutosh Lawania and Vineet Saxena, Myntra is an online apparel e-commerce platform. Although the company was started with the idea of personalized gifting, it forayed into fashion and lifestyle. In 2014, Flipkart acquired Myntra for approximately $370 million. Myntra continues to operate independently.
PhonePe was founded by Flipkart’s very own Sameer Nigam, Rahul Chari. The company started off and still operates as an online payment solution around UPI (Unified Payments Interface). The UPI was an initiative kicked off by National Payments Corporation of India. UPI allows people to transfer money between bank accounts. The company was valued at $5.5 billion and was reported to be acquired by Flipkart to operate as an independent business unit.
Founded by Praveen Sinha, Lakhsmi Potluri, Arun Chandra Mohan, Jabong is a portal for independent sellers for apparels, fashion accessories and lifestyle products. Flipkart acquired Jabong through Myntra for $70 million. With the acquisition, Jabong brought with it over 1,500 sports, Indian ethnic, and other fashion labels.