Ixigo.com, a travel search marketplace, is expected to reach profitability in next six months, Aloke Bajpai, CEO of Ixigo.com, told FE. Le Travenues Technology, promoter of the company almost halved its losses for the year ended March 31, 2015 to Ra 8.5 crore from Rs 15.6 crore in FY14, according to company’s filing with ROC.
Ixigo.com operates as a meta search platform which leads the user to an OTAs or an airline website to make the final transaction. Ixigo earns revenue from margin which is paid by the hotel, airline or the supplier.
Airline bookings fetch margins of 4-5% while margins for smaller hotels go as high as 15%. Bajpai is optimistic of the volumes seen in the airline category. “More than the margins, airlines are a volume game for us. We are doing more than 2,000 airline bookings daily and the hotels bookings are touching 500 per day,” said Bajpai.
In March, Ixigo had launched Ixibook, where the user can make the booking within the application and not be redirected to the supplier’s portal. It helped the company keep dropouts under control and provide a consistent seamless experience to the user.
Venture Capitalist have also increased there exposure towards the travel category with Ibibo’s $250 million funding leading internet funding in January-March 2016, according to Jefferies Equity Research. In 2015, travel comprised 4% of the total internet funding but in Q1 CY16 the share grew to 21%, the report added.
Bajpai has also attributed Oyo Room’s $100 million funding from SoftBank in 2015 as a catalyst in the budget hotel category and travel. “Game has suddenly moved towards hotels and packages. It has become a focus area because on the air side(airline booking) commissions continue to be narrow,” he added.
Ixigo is funded by SAIF Partners, Makemytrip, BAF Spectrum, and Micromax. In August 2011, SAIF and Makemytrip had jointly acquired Ixigo.com for $18.5 million. The recent valuation markdown of Flipkart to $11 billion by Morgan Stanley has forced companies to take a harder look at their business model.
In FY15, Ixigo trimmed its expenses to Rs13 crore from Rs19 crore and registered 30% jump in revenues to Rs 4.43 crore from Rs 3.42 crore in the previous year.