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Ixigo aims to double sales in FY18 with up to Rs10 crore marketing push

LiveMint logoLiveMint 05-06-2017 Yuvraj Malik

New Delhi: Armed with fresh funds from Sequoia Capital and Chinese investor Fosun Kinzon Capital, ixigo, a meta-search engine that aggregates information from different travel portals, has planned a slew of technology innovations and a big push on marketing to double sales in the fiscal year ending March 2018.

Ixigo, run by Gurugram-based Le Travenues Technology Pvt. Ltd, aims to close the current fiscal year with sales of about Rs50 crore, up from Rs23 crore it clocked in 2016-17, co-founder and chief executive officer Aloke Bajpai said.

In 2015-16, the platform posted a loss of Rs15 crore on revenue of Rs12 crore, documents filed with the Registrar of Companies show.

“Our estimate is based on two factors. One, the overall travel market, which comprises flights and hotel bookings, is growing at 40-50% year-on-year,” Bajpai said.

“Secondly, so far 80% of our user acquisition has happened organically, either through referrals or SEO (search engine optimization) effort or B2B (business to business) partnerships where we do barter deals; Going forward we see the user base growing on the back of paid marketing,” he added.

Bajpai said ixigo will spend Rs8-10 crore on marketing and promotions this year. Its campaign will cover digital media channels Facebook, Twitter and Instagram, while only a fraction of the budget will be spent on offline mediums like television and billboards.

Ixigo, similar to Germany-based (only hotels) and China’s Skyscanner (only flights), aggregates information on flights, trains, hotels, and travel packages from different platforms (online travel agencies, flight companies, hotel chains and offline tour operators). It displays prices for the same flight or the hotel room from different portals and redirects the user to book directly from the travel provider’s webpage.

It essentially serves as an intermediary between the user and travel booking websites and earns a commission on each booking made. Bajpai said the typical fee charged as a percentage of the ticket value is 4-7% for flights, 8-10% for hotels and 5-10% for cabs and buses.

The other part of revenue, which is lower than transactional revenue, comes from selling ad space on its website and apps. In a given month, on an average, ixigo receives 10 million unique users doing around 300,000 transactions, Bajpai said.

In March, ixigo raised $15 million in a series B round led by Sequoia, following a strategic minority investment by Micromax in 2016.

Earlier in 2011, SAIF Partners and online travel services firm MakeMyTrip bought stakes in ixigo from early investors BAF Spectrum, angle investors and co-founder Dharmendra Yashovardhan. From the $18.5 million spent by SAIF and Makemytrip, about $6.5 million was invested in the company, Bajpai said.

Ixigo plans to use the fresh funds towards product development and funding the marketing effort. Besides this, the company will invest in artificial intelligence and big data analytics to improve its recommendation engine and create new products.

Ixigo is developing a product that will collate deals and discounts on travel portals and display it intelligently to users querying for the particular travel destination or for travel in that time period.

“Say for example there is a sale running on Qatar Airways to the US and it is valid for a few days in July, we will be able to spot that for you and give you a notification that if you are travelling to the US in July, this is a great deal for you,” Bajpai said. “We will be able to define this for each user.”

Another case in point is ixigo’s fare prediction engine, rolled out in March, that tells the user (based on past trends and data analytics) if fares for the queried flight will drop or rise in the future, thus enabling the user to get tickets at better prices.

Bajpai said the scope of the feature will be extended to most flight routes in the next quarter.

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