Flipkart acquires Cleartrip for $40 million, the deal will be mixed of cash and equity

• Flipkart has acquired hotel and air aggregator Cleartrip for $40 million.
• It has enhanced its portfolio by picking up a 27% stake in Arvind Fashions Ltd and undisclosed stake in Shadowfax, a logistics startup.
• The E-commerce giant this year will continue to make strategic investments across sectors to build an ecosystem around it.

Walmart-owned E-commerce company Flipkart has announced that it has finalized all the documentation required for India's one of the oldest travel booking portals in India. To strengthen its portfolio Flipkart this year will continue to make strategic investments across sectors to build an ecosystem around it.

Flipkart has announced that the Cleartrip acquisition deal will be mixed of cash and equity and is likely to value Cleartrip at around $40 million. The management of Cleartrip decided to sell off the company after it got affected due to the pandemic, for the management it is considered to be a distress sale for the 15-year-old Mumbai firm.

Founded in 2006 as a hotels and air aggregator by Hrush Bhatt, Matthew Spacie, and Stuart Crighton. The company was set up with an aims to provide booking of hotels and flight tickets at finger touch of the customers. The company had acquired flyin.com in 2018 to strengthen its position in its segment. It has been fighting bigger competitors, such as MakeMyTrip and GoIbibo, for the past decade.

According to the report, “Flipkart now wants to invest in Cleartrip and push the pedal on this category. They will back Cleartrip so that it can take on the bigger players in the highly crowded online travel booking industry, which has not been able to clock profits due to the low margins in air travel,”.

Also Read: Flipkart to deploy more than 25,000 Electric Vehicles in its Supply Chain by 2030

For Cleartrip, it has been tough going as it relies on airline travel and less so on hotel bookings. The company laid off 400-500 employees in the thick of the pandemic last year when the travel industry was completely shut. In FY20, Cleartrip’s revenue stood at Rs 318 crore and losses at Rs 14 crore.

In October, it picked up a 27% stake in Arvind Fashions Ltd.’s subsidiary Arvind Youth Brands, which owns the Flying Machine brand, for Rs 260 crore. Flipkart also enhanced its portfolio by backing Shadowfax, a logistics startup, as it led a $60-million investment round to accelerate hyperlocal deliveries. Flipkart has also been doubling down on its investment in Ninjakart, a supply-chain startup for fresh produce.

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