Exclusive: Cleartrip Raises $18.5 Million From DFJ, Mahindra Group For Offline Push
Exclusive: This is one news we have been sitting on for the last two weeks. Here is the scoop as the company reveals the details to us officially. Cleartrip, India’s leading online travel portal, has landed $18.5 million funding in Series C from Draper Fisher Jurvetson and Mahindra Group. DFJ has led the round with $10 million, while the rest of the amount is invested by Mahindra Group (it owns the vacation resort business Club Mahindra, besides auto and financial services businesses) and the existing investors in the company.
This takes the total funding received by Cleartrip to a little over $30 million. Previously, Cleartrip received $3.7 million funding (September 2005) from Kleiner Perkins and Sherpalo, $8 million from DAG Ventures and Gund (Oct 2006), besides the current round.
Cleartrip will be the second Indian online travel company to land three rounds of funding. MakeMyTrip had received $38 million in three rounds of funding. In an exclusive interview to VC Circle, Sandeep Murthy, CEO of Cleartrip, said that the money will be largely used to strengthen the offline presence, diversify the product mix and acquire a few companies (mainly offline) in car rental, cruises or even a meta search company.
Murthy said that the online travel can get saturated, and they need to look at new ways to make the pie bigger. So they are looking at offline in a big way. Currently, air constitutes 78 per cent of the total travel ticketing pie, 15 per cent rail, 5 per cent hotel and the rest for other related services. But an average travel agency sells 95 per cent air and 5 per cent hotel, leaving a lot of scope for diversifying the travel product mix.
Essentially, Cleartrip is looking at the travel pie in its entirety and not just as an online ticketing company. In an interview to VC Circle, Mohanjit Jolly (in the picture), the director of Draper Fisher Jurvetson, and the lead for the fund in this investment, said that he chose to invest in Cleartrip on three basic premises - team, technology and traction. He said that it’s very big and exciting market. Once the infrastructure growth (such as airports and roads) takes off, and the broadband penetration gains traction, the demand for online travel services will only boom.
He also said that he is a firm believer of the Indian economy quadrupling or quintupling over the next few years.
