Earlier, Flipkart was involved In the Travel industry business through partnership. Now, as per the latest reports, Flipkart is on the way to acquire Cleartrip, an online travel portal. This acquisition will help Flipkart to get involved in the travel and hospitality sector directly. Cleartrip is in a lot of trouble due to the minimal business. Covid has affected the travel sector badly.
Cleartrip has raised a total amount of $75 billion till now. It concluded the recent financial round in 2016 where Concur Tech and Gund Investments participated as the major investors.
How Cleartrip Acquisition will Help Flipkart?
Flipkart Group is in advanced talks to buy Cleartrip in a distress sale. Cleartrip is an online platform to buy air tickets and hotel bookings. The information was revealed by the three persons who have been involved in the current discussion. They did not reveal their identity. Flipkart is all set to strengthen its operation in the hospitality sector with the current strategic acquisition.
The deal will take place through the wash and stock exchange. As per the insiders, the deal will be closed in the next 10 days at around $40 million. The current deal is a surprising one due to the continuous downfall of the travel sector. The new corona wave has again forced people to stay at home. It may be a long-term strategy for Flipkart to do such an acquisition.
Talking about the current deal, an insider person said:
“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.”
The person further added:
“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.”
Further Details about Flipkart Plans
Flipkart Is in the travel business partially since 2018. It has introduced travel booking through its platform with the collaboration of MakeMyTrip. In 2019, it collaborated with Ixigo for further operations.
Walmart-owned Flipkart has shown a lot of interest in the Travel sector in recent years. The current acquisition talk is going on for the last six months. Finally, Flipkart is succeeded to acquire Cleartrip. The e-commerce giant has already snapped up offline retail and fashion companies to grow these categories.
Last year, Flipkart signed a strategic deal with Liberty General Insurance to enter In travel insurance sector. As per the deal, Flipkart is providing travel insurance to those who booked tickets through the Flipkart platform.
When contacted about the Cleartrip deal, Flipkart did not comment anything. The company did not reply to emails also sent by different media portals.
Cleartrip last raised an undisclosed amount from Concur Technologies and Gund Investments in 2016, taking its total fund-raise to $75 million. The company acquired Saudi Arabian travel startup Flyin in 2018 to expand in West Asia.
Talking about the current deal further, an insider out of three persons added:
“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.”
Flipkart is on an acquisition spree since last year. The e-commerce giant acquired Scapic, an augmented tech firm. The acquisition will help Flipkart to make the user experience better on its platform. It also acquired Mech Mocha to enter the online gaming business.