Indian e-commerce company Flipkart plans to acquire 100% stake in Cleartrip

Flipkart said it will acquire 100% stake in Cleartrip and under the terms of the agreement, the Mumbai-based company will continue to operate as an independent brand and retain all its employees while working closely with Flipkart to further develop technology solutions.

It is reported that Cleartrip has become Amazon's partner in India since 2019, providing support for the latter's ticketing system.

Kalyan Krishnamurthy, Group CEO, Flipkart said , “The Flipkart Group is committed to transforming the customer experience through digital commerce. For many of our customers, Cleartrip is synonymous with travel and as we diversify our business and look at new areas of growth, this investment will help strengthen our broader offering to our customers . ”

While the two companies have not disclosed the size of the deal, media reports and sources familiar with the developments put the transaction at around $40 million.

Sources said it could be a fire sale for the company, which had raised about $75 million in total venture capital as of 2016 from companies including Lightbox and SAP Concur.

The acquisition is understood to have the potential to accelerate Flipkart’s expansion into the travel space. The e-commerce major entered the travel space in 2018 and began doubling down on the sector the same year it partnered with Ixigo.

Flipkart will now sever ties with Ixigo, which was its only OTA partner so far, according to analysts tracking the sector.

“ Cleartrip is likely to become Flipkart’s only online travel agency partner, which will be a big loss for Ixigo as around a quarter of its transactions come from Flipkart," said an analyst requesting anonymity .

Experts point out that in the overall travel sector, smaller players stand little chance. They add that   Both Triangle and Cleartrip are struggling to stay afloat .

The expert also said the OTA game remains a huge cash burner, which has been made worse by the pandemic , and this year could see more consolidation.

India

E-commerce

Acquisition