The online travel industry is set for consolidation. 7 months back, desiya was acquired by TravelGuru (rumored value: $25mn) and now, TG, the online hotel aggergator has sold it’s majority stake to Expedia for $17mn (source).
The deal values TravelGuru and Desiya.com at about $30 million, which to me looks like a value erosion.
TravelGuru is funded by Sequoia Capital and Battery Ventures with infused funds of $25 mn ($10mn in the first round by Sequoia, $15mn from Sequoia and Battery Ventures combined)
Majority stake for $17mn? Not sure whether the number is really reflective of the TG’s valuation?
The online travel industry in India was estimated at $2 billion in revenues (the value of transactions as opposed to the earnings of travel firms) in 2007 and is expected to grow to $6 billion in 2010.
The online hotel aggregation business is still in it’s infancy and many of these data players will end up in the laps of deep pocket players.
To ponder: Are we witnessing a penguin effect?