India’s leading ecommerce marketplaceis in advanced stages to acquire Cleartrip, the Mumbai-based online travel aggregator, in a deal valued at around $40 million, according to sources familiar with the development.
The transaction, which is expected to close soon, is most likely to be a cash-cum-equity deal. The acquisition brings travel and hospitality services to Flipkart’s portfolio, gives the ecommerce giant a wider play in the online consumer.
Further, Flipkart also gets the leverage to cross-sell its services through the travel and hospitality segment. It had introduced travel bookings in 2018 through a partnership withbut later switched to the next year.
On the other hand, it has been a very challenging phase for Cleartrip, which was founded in 2006. The COVID-19 pandemic continues to have very severe impact on the travel and tourism segment, and the country is now in the middle of a second wave, clouding the segment’s recovery.
Cleartrip had last raised an undisclosed amount of funding from Concur Technologies and Gund Investments in 2016, taking its total fund-raise to $75 million. At one time, it was valued at around $430 million.
Flipkart has been expanding into segments outside its core ecommerce business, but these areas such as travel and hospitality or insurance expands the businesses’ scope of becoming a one-stop-shop for consumers.
In September 2020, Flipkart tied up with Liberty General Insurance to provide travel insurance for flights booked on its platform.
Besides, Flipkart has also been strengthening its offline play with strategic investments in brands such as Flying Machine and Aditya Birla Fashion in 2020. It made an investment of Rs 1,500 crore to acquire 7.8 percent stake in Aditya Birla Fashion, which owns brands like Pantaloons, Allen Solly, and Peter England.
Flipkart has also invested Rs 260 crore in Arvind Fashions, which owns the denim brand Flying Machine.