The online travel industry is set for consolidation. 7 months back, desiya was acquired by TravelGuru (rumored value: $25mn) and now, TG, the online hotel aggergator has sold it’s 
majority stake to Expedia for $17mn (source).
The deal values TravelGuru and Desiya.com at about $30 million, which to me looks like a value erosion.
TravelGuru is funded by Sequoia Capital and Battery Ventures with infused funds of $25 mn ($10mn in the first round by Sequoia, $15mn from Sequoia and Battery Ventures combined)
Majority stake for $17mn? Not sure whether the number is really reflective of the TG’s valuation?
The online travel industry in India was estimated at $2 billion in revenues (the value of transactions as opposed to the earnings of travel firms) in 2007 and is expected to grow to $6 billion in 2010.
The online hotel aggregation business is still in it’s infancy and many of these data players will end up in the laps of deep pocket players.
Related: ClearTrip’s $18.5mn funding, Travelocity looking to acquire an Indian OTA,
To ponder: Are we witnessing a penguin effect?
It haslots of opportuanity in career making.
this is intresting work.
“The deal values TravelGuru and Desiya.com at about $30 million, which to me looks like a value erosion.”
Ashish – you are a kind soul to put it this way…$30 million valuation is a disaster!
Since they have raised $25 million, severely doubt if there will be anything left for the founders once the VC take their portion off the top…can’t imagine this being anything apart from the proverbial firesale…something must have gone gravely wrong for the denouement to happen this way…
This is very very scary! Sequoia, Battery, and a very sweet looking facade – hard to digest!
Now what of other entrepreneurs – we look at TG and other well funded startups as models of wealth creation. If they project something else, and numbers show something else, its a dangerous reality!
something is really fishy here..either the data or TG’s success (looks like they hyped it a lot)
I am not sure how much penetration TG had in hotel sector where Yatra seems to be kicking their butt.
I wish biggies spend more money on enabling infrastructure (e.g. providing free software to hotels to support real time bookings) since it will benefit them and industry as whole.
- Shailender
Interestingly, VCCircle now says the valuation could be around USD 75 million..
http://www.vccircle.com/2008/06/30/exclusive-travelguru-sells-majority-stake-to-expedia-for-17-million/
I guess its better to wait for Travelguru to make an official statement rather than believe such hearsay figures (though the new figure of USD 75 million looks a bit closer to the mark)..
Yeah..I will wait for TG to come up with an official statement..or will inquire from Sequoia and get the numbers.
Valuation of $17mn for majority stake seems not justified…
-Ashish