Flipkart will acquire embattled travel and booking platform Cleartrip, one of the oldest Indian players in the segment. This will be the latest addition to the list of acquisitions by the Walmart-owned Indian e-commerce major in various sectors.
The deal is likely to be a mix of cash and equity and will see Cleartrip valued at $40 million, The Economic Times reported. The daily added that talks over the deal are likely to end soon.
Flipkart and Cleartrip, both are yet to confirm the deal.
Hrush Bhatt, Matthew Spacie and Stuart Crighton founded Cleartrip in 2006 as an air travel and hotel booking aggregator. The deep jolt to travel and tourism industry on account of the coronavirus pandemic led to Cleartrip slipping into distress.
Before the pandemic and subsequent lockdowns, Cleartrip faced tough competition after Naspers merged MakeMyTrip and its portfolio firm GoIbibo in 2016. Naspers then sold its stake in the company to China-based Ctrip and exited the challenging market.
Cleartrip also came under pressure with other players like EaseMyTrip, Booking.com and Yatra entering the space.
Concur Technologies, an integrated travel and expense management solutions provider, DAG Ventures and Gund Investment are among the investors in Cleartrip. Early backers like Kleiner Perkins, Sherpalo Ventures and DFJ exited the company over the course of time. Cleartrip has reportedly raised $70 million in investor capital in total and was valued at around $300 million back in 2016, when it last raised capital.
With Flipkart's backing, Cleartrip will be in a position to weather the turbulent and competitive travel and tourism sector. Flipkart intends to retain Cleartrip's management and staff and continue to run it as a separate entity.
The deal also marks a change in Flipkart's strategy as it is moving away from partnerships and turning towards acquiring companies. The homegrown e-commerce platform had joined hands with MakeMyTrip, and then with Ixigo to offer air travel booking services. This acquisition will firmly place it in the segment.
(Edited by Vivek Punj)