Flipkart Likely To Buy Covid Impacted Travel & Hotel Booking Platform ClearTrip For $40 Million

For the online retailer, travel has emerged as a significant category after it has moved the focus to grow more in these categories.

At a time when the travel and hospitality sector is still gasping for breath as the second wave of covid-19 sweeps the country, the e-commerce retailer Flipkart backed by Walmart is likely to acquire the distressed travel and hotel booking platform ClearTrip for an approximate $40 million value.

As per the report in Mint, the cash-and-stock deal is valued at almost $40 million and likely to be closed in the next few days. Flipkart Group’s plan to acquire the travel company comes amid the worst time in history for the hospitality sector reeling under the impact of the pandemic.

How it will aid Flipkart’s ambition in the travel sector?

The e-commerce major had inducted travel bookings in 2018 through a partnership with MakeMyTrip, and later joined hands with Ixigo the next year.

In September 2020, Flipkart also partnered with Liberty General Insurance to offer travel insurance for flights booked on its platform. For the online retailer, travel has emerged as a significant segment after it has reduced exposure in offline retail and fashion to grow more in these categories. For more than five months both companies were exploring the option.

In recent times, Flipkart went ahead to close several deals and the current ClearTrip acquisition will become its fourth transaction last year.  Flipkart is eying an online travel firm with a strong recall value among its members and customer base, and the company will be able to leverage Cleartrip's strength in terms of its direct supply of business from airlines and hotels.

The acquisition will help the e-commerce major to compete with its rivals including MakeMyTrip, Yatra, Booking.com, EaseMyTrip, and IPO-bound ixigo.

On the other hand, Cleartrip has managed to raise an undisclosed amount from Concur Technologies and Gund Investments in 2016 which took its total fundings to $75 million. The travel firm went on to buy Saudi Arabian travel startup Flyin in 2018 to expand in West Asia.

Cleartrip’s business has been severely hit due to travel and border restrictions imposed post the outbreak of the pandemic. Other investors in the company include Kleiner Perkins, Sherpalo Ventures, and DFJ, which have successfully exited the startup.