Online travel businesses continue to attract private money. Venture capital firm Sequoia Capital India has closed an investment of around $10 million in online travel agency Via (formerly FlightRaja).
Sequoia completed the investment in the Bangalore-based company in December 2009, sources close to the development told VCCircle. Via had earlier raised $5 million from NEA-IndoUS Ventures in 2007.
Via is believed to be the largest business-to-business (B2B) online travel agency (OTA) in India.
When contacted, Sequoia Capital declined to comment. Vinay Gupta, the co-founder and CEO of Via, could not be reached for comments. Its founders are Vinay Gupta, Amit Aggarwal, Rohit Gaddi, Harsh Azad and industry veterans including Niranjan Gupta and Ashwini Kakkar.
Founded in July 2006, Via provides services like bookings for flights, railways, buses and holidays. Unlike other travel portals, Via works with agents who process their customers’ transactions through the online portal.
“While other OTAs have made travel agents less relevant, this company is working with them,” said a source familiar with the transaction. While OTAs are expected to grow in metros, players like Via can address the semi-urban and tier-II and III cities. These bookings can be accessed through channels like mobile phone, kiosks, internet and travel agents. Via has built an offline presence through 15,000-20,000 agents across India in over 900 cities in India.
Earlier, Sequoia has, along with Battery Ventures, invested in online hotel distribution network Travelguru, where the two funds committed $25 million in two rounds of funding. Travelguru was then sold to US-based online travel firm Travelocity Global for a reported $10-12 million in 2009.
Since 2006, travel portals such as Cleartrip, Yatra, Travelguru and Makemytrip have raised large rounds of funding. The industry went through a rough patch in 2008 on account of the slowdown and concerns over commission with aircraft carriers. But, OTAs have been able to build a scalable business model and have been able to prove the transactional abilities of the Indian masses over the internet. Some travel portals, who have now turned profitable, are also looking at the possibility of public offerings. This seems to have revived the investor interest in the sector.