IDG, Vertex lead $23m round for India's Yatra

Existing investors Norwest Venture Partners, Intel Capital, TV18 Group and Reliance Venture Asset Management also participated in the round. Dhruv Shringi, co-founder and CEO of Yatra, told The Economic Times that the investors had committed an additional INR1.4 billion for future acquisitions.

The company is expected to go public within the next three years, most likely on a US exchange.

The new funding will be used to accelerate Yatra's growth by strengthening its position in the domestic hotels and package holidays business and to support strategic investments in mobile technology. The company positions itself as a one-shop-stop for travel-related services, selling 20,000 travel tickets and 5,000 hotel and holiday packages each day.

Found in 2006 in Gurgaon, Yatra received $5 million from Norwest, TV18 and Reliance in 2006, AVCJ Research's records show. At the time the company was purely an online booking portal for air, rail and bus tickets. Intel Capital committed an undisclosed sum in 2008 and a further $60 million followed in 2011-2012 across two tranches.

The first tranche in 2011 worth $45 million - which was said to be a pre-IPO round - was led by Valiant Capital Management, with participation from existing investors. The capital was earmarked for sales and marketing plus lateral acquisitions to support Yatra's expansion into hotels and package holidays.

The following year Yatra duly boosted its hotels coverage in 2012 with the acquisition of Travelguru, which was then India's largest hotel distribution network. Other acquisitions made around the same time include Wortal Technologies, operator of event ticking portal Buzzintown.com, and online hotel bookings provider Magic Rooms Solutions.

The most recent round is said to value the company at approximately $400 million, with institutional investors now holding an 80% interest between them. It expects to report revenues of $65-70 million for the financial year ending 2015 but has yet to turn a profit.

"The investment in Yatra represents our Fund II's strategy of selective growth investments in market leading technology companies. Driven by Dhruv's exceptional leadership, the company has achieved market leadership in the domestic hotels and packages segment," Sudhir Sethi, founder and chairman of IDG Ventures, said in a statement.

Yatra competes with the likes of Cleartrip and MakeMyTrip. Both have received VC funding, with the latter going on to raise $70 million through a NASDAQ IPO in 2010.

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• Topics
• Venture
• Technology
• Consumer
• South Asia
• TMT
• Consumer
• India
• Vertex Management (II)
• IDG Ventures
• Venture
• Norwest Venture Partners
• Intel Capital