Mumbai: Sequoia Capital India is providing a second round of funding to Travelguru.com. Ever since the dream listing of Info Edge, there has been a lot of interest in the dotcom companies.
Ashwin Damera, Founder and CEO of Travelguru.com feels that there is a lot more awareness in Indian and US Venture Capitalists (VC).
“This round is led by Battery, which is a leading US venture capital fund. It is their second or third investment in India, which is very encouraging for us,” said Damera.
He thinks that access to capital is a lot easier now than it was 12-18 months back.
“When you have more VCs knocking on your door, you are able to push up the price but that’s limited to a certain extent because ultimately it’s the fundamentals of the company, the market and the space which adds up to your valuation. Bargaining can help you get up to 10-15 per cent more,” he adds.
Sequoia Capital India had earlier pumped in about $10 million. This time it is $15 million.
“The whole reason we are taking this funding of $15 million is to move away from being known as a niche segment which is just online. We want to take it offline and rollout retail outlets across India so that the common man who might not have a computer or Internet, can also walk in and experience a product which has better service and better pricing,” he informs.
Travelguru is the largest hotel consolidator in India, with more than 2,200 Indian and 70,000 international hotels. “We want to take that to the layman on the street through retail outlets. So a lot of funding will go towards brand building and technology, but we want to make it a broad-based awareness campaign,” he says.
The domestic travel market in India is growing by 30 per cent. The space is competitive and there are about 4-5 well-backed players.
“We are not just competing with online players, you are competing with the travel agent, the airlines own websites. So margins are likely to come down,” he feels.
Sequoia Capital India MD K P Balaraj sees tremendous level of excitement on the Internet space from investors looking at India.
“If you look at the recent listing response of Naukri, it’s sort of understandable to see that drive,” informs Damera.
Sequoia Capital feels that there will be big winners across categories like travel, but the risk of overfunding is also prevalent and people need to remember that.
"In US and China where there were was typically this kind of investment, the top 2-3 companies in each sector make a lot of money for shareholders, management teams but there are also a number of companies that didn’t do as well,” Balaraj warns.
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