Flipkart Group is close to buying travel and hotel booking platform Cleartrip in a distress sale, three people aware of the matter said, as the Walmart-owned e-commerce giant strengthens its operations in the hospitality segment.
The cash-and-stock deal valuing Cleartrip at almost $40 million may close in the next 10 days, said two of the three people cited above, all of whom spoke on condition of anonymity. The deal comes at a time the hospitality industry continues to reel from the onslaught of the coronavirus pandemic.
“The travel and hospitality industry has been severely affected by the impact of covid-19, with travel booking platforms unable to get back on their feet,” one of the three people cited above said. “The Cleartrip acquisition allows Flipkart to now have a direct play in the travel and hospitality segment, which it offered earlier through partnerships. The acquisition may also allow Flipkart to cross-sell financial services and products like insurance and payments for travel bookings through Cleartrip,” the person added.
Flipkart introduced travel bookings in 2018 through a partnership with MakeMyTrip, and switched to Ixigo the next year.
The person said travel continues to be a big focus for Flipkart, which has snapped up offline retail and fashion companies to grow these categories. The two companies have been holding talks for the past five months, this person added.
In September 2020, Flipkart tied up with Liberty General Insurance to provide travel insurance for flights booked on its platform.
A Flipkart spokesperson declined to comment. Queries emailed to a spokesperson for ClearTrip remained unanswered till press time.
Cleartrip last raised an undisclosed amount from Concur Technologies and Gund Investments in 2016, taking its total fund-raise to $75 million.
Cleartrip’s other investors include Kleiner Perkins, Sherpalo Ventures, and DFJ, which have successfully exited the startup.
“The deal is in its final stages; there could be a change in management by the end of this month. They were trying for an exit for some time now because after SAP acquired Concur, the focus moved away from travel,” one of the people cited above said.
German enterprise software major SAP acquired Concur Technologies for approximately $8.3 billion in 2014.
In November 2020, Flipkart acquired augmented reality company Scapic to build immersive shopping experiences. The same month, it acquired Mech Mocha to scale its gaming business.
Flipkart has also picked up stakes in offline brands, including Aditya Birla Fashion and Retail Ltd; Arvind Youth Brands and Wrogn-owner Universal Sportsbiz Pvt. Ltd to expand the choice on its platform and establish an offline-retail presence.
This article was first published on livemint.com.