Battle in the sky: India’s two leading travel portals fight it out on Nasdaq

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Tech IPOs from India are as rare as comets. There were none last year, and we saw two earlier this year – Infibeam became the first Indian ecommerce company to be publicly listed on the Bombay Stock Exchange, preceded by computer security software maker Quick Heal’s IPO.

So all eyes in the tech ecosystem are on travel portal Yatra, which became only the third Indian internet company ever to be listed on the NASDAQ as $YTRA on Monday. It follows in the footsteps of its bigger rival, MakeMyTrip, which had its NASDAQ IPO as $MMYT in 2010. Earlier, media and entertainment portal Rediff had gone to NASDAQ.

This week’s listing follows the reverse merger of Yatra with Terrapin 3 ($TRTL). Terreapin 3 was a special purpose vehicle created in the US for merger with an existing business abroad. The merger, approved by shareholders last week, makes Terrapin 3 a subsidiary of the new entity Yatra Online. The $TRTL ticker symbol is replaced by $YTRA.

The NASDAQ listing aims for a much-needed infusion of funds for Yatra to keep up with its dominant rival. MakeMyTrip merged with Ibibo in October, combining two of the biggest travel portals in India. MakeMyTrip had earlier raised US$180 million from China’s Ctrip, while Tencent-backed Ibibo raised US$250 million from South Africa’s Naspers in February.

VC and private equity funding has dried up of late with hedge funds in a wait-and-watch mode. This makes an IPO a more attractive option for established companies to raise big money.

See: Fleeing Tiger: hedge funds fall off the cliff in India

Investors desperate for exits

The online travel space in India has seen price wars and deep discounts as upstarts like TravelTriangle, TripFactory, and Thrillophilia tried to pull the rug from under the feet of more established players. This led to the merger of MakeMyTrip and Ibibo. Now Yatra is beefing up with NASDAQ listing, which will lead to an IPO.

Norwest Venture Partners, Vertex Ventures, IDG, and Intel Capital are among the investors in Yatra, founded by Dhruv Shringi, Manish Amin, and Sabina Chopra in 2006. Sabina worked with Japan Airlines and others for 16 years before jumping into India’s nascent travel ecommerce scene, and is counted among India’s leading women entrepreneurs.

See: Can’t eat paper profits: India’s startup ecosystem has a vital cog missing

India’s startup ecosystem is yet to mature sufficiently for investors to get timely and substantial returns, which can keep the pot boiling. Hence Yatra Online’s NASDAQ listing and IPO can be a game-changer. If it goes well, others may be encouraged to take the plunge.