TravelGuru sells majority stake to Expedia

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.

Related: ClearTrip’s $18.5mn funding, Travelocity looking to acquire an Indian OTA,

To ponder: Are we witnessing a penguin effect?