Online travel portal Travelguru's deal with world's leading travel portal Expedia is understood to have been called off. Travelguru and Expedia were on the verge of signing the deal a couple of months ago (on June 30, VCCircle reported that Travelguru had signed a deal with Expedia for a sale). The US based portal is believed to have developed cold feet at the last minute owing to valuation differences.
When contacted, Ashwin Damera, CEO, Travelguru, said: "All I can say is that Travelguru’s business continues to grow very well. Our focus on hotels and holidays is proving to be the right choice in an industry that is at a point of significant change. We have grown our business on the strength of our people, supplier relationships and customer orientation and will continue to do so by ourselves." (See Damera's full response to our email below this article.)
Industry sources say Travelguru was expecting a valution of $70 million, which Expedia was not willing to pay. There is no independent confirmation of the reasons why the deal fell off. Damera, co-founder and CEO of Travelguru, said that no such deal took place, however, did not deny the fact they had talks with Expedia. Even when VC Circle first reported the deal, Ganesh Rengaswamy, co-founder of Travelguru, only disputed the valuation figures in the report, not the deal as such.
Travelguru has raised upto $25 million in two rounds of funding from Sequoia and Battery Ventures. Last year it had also acquired online hotel rooms consolidator Desiya.com in a $25 million all stock deal. Travelguru, a Harvard Business Plan contest winner, is mainly focused on hotel aggregation which accounts for about 90% of its revenues.
Expedia entered the already crowded Indian travel market in March this year. At that time Expedia India Managing Director Sharat Dhall had said that the firm was looking at inorganic routes for growth in the country.
Interestingly, in July this year, Expedia announced that it has entered into an agreement to acquire Italy-based hotel booking portal Venere Net ApA from Advent International and the founding partners. Venere.com has aggregated about 29,000 hotels and bed and breakfast properties throughout Europe and the U.S.
Ashwin Damera's response to our email
When contacted about this a few months back by Sahad I told VC Circle that all this news is mere speculation. It seems like you guys have finally figured out that what I said was indeed true – that no such deal took place! At that time, without verifying facts and without paying heed to my denial, you guys went ahead and wrote an article saying that a deal had already taken place.
I hope that you guys at least now realize, in hindsight, that you were wrong and that you were writing speculative reports without mentioning that it was speculation. It is interesting that you now term the deal as “Travelguru’s proposed deal for sale”.
Sadly when you filed a speculative report on this earlier the word “proposed” was omitted and you misled your readers into believing that such a deal had already taken place. All I can say is that Travelguru’s business continues to grow very well. Our focus on hotels and holidays is proving to be the right choice in an industry that is at a point of significant change.
We have grown our business on the strength of our people, supplier relationships and customer orientation and will continue to do so by ourselves. If you do write an article on this subject I would insist that you include the first 3 paragraphs of this email so that readers do understand that sometimes the so called “confirmed” reports are not really what they claim to be.
It's a fact that the deal was in the works and it's normal for a deal to fall off at the last minute owing to management/price differences.