Walmart-owned e-tailer Flipkart is set to acquire online travel aggregator Cleartrip in a distress sale with the deal likely to be announced during the next few days.
Cleartrip, which generates more than 80{29395a375d156e93286dd6e7185ccfdd643af63705165a979bd3711654ea3aad} of its revenue from airline reservations, reported that a 2.5{29395a375d156e93286dd6e7185ccfdd643af63705165a979bd3711654ea3aad} drop in earnings in FY20, while Goibibo zoomed forward in exactly the same period with an 11{29395a375d156e93286dd6e7185ccfdd643af63705165a979bd3711654ea3aad} increase at Rs 1,595 crore, which is nearly five times that of Cleartrip’s.
Flipkart, which is fighting a close battle with US e-tail giant Amazon for one-upmanship in India’s booming e-commerce marketplace, will use Cleartrip to market and expand into other product categories, such as online bookings of hotels and flights, to boost its overall gross merchandise value (GMV). The development comes close on the heels of Flipkart partnering with Ahmedabad-based Adani Group , led by tycoon Gautam Adani, to develop one of India’s biggest logistics hubs and data centres. Industry experts termed the alliance as a strategic move that will help Flipkart march against not just Amazon but Jiomart, too.
Cleartrip counts DAG Ventures, Gund Investment Corporation, and Concur Technologies as its key investors and has increased increased funds in 2016. A questionnaire emailed to some Flipkart Group [spokesperson didn’t elicit a response. Aside from eyeing the controlling stake in Cleartrip, Bengaluru-headquartered Flipkart, that owns trend e-tailer — Myntra, has been busy recently, picking up an 8{29395a375d156e93286dd6e7185ccfdd643af63705165a979bd3711654ea3aad} stake in Aditya Birla Fashion &
Retail for Rs 1,500 crore and investing Rs 260 crore in Arvind Youth Brands, an arm of denim giant Arvind, that gave it rights to popular apparel brands such as Flying Machine.
While its parent Walmart merged its wholesale operations in India by merging the business with Flipkart, the e-tailer led significant investments in startups like hyperlocal delivery specialist — ShadowFax and fresh produce
supply chain company — Ninjakart. Mumbai-headquartered Cleartrip, founded by Stuart Crighton, Hrush Bhatt, and Matthew Spacie in 2006, has been severely affected by travel restrictions caused by this Covid-19 pandemic.
The acquisition of its nearest rival Goibibo by Nasdaq-listed Makemytrip further dimmed its prospects in a field where margins in airline reservations are paper thin.
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