Helion, Sierra plan to invest in travel portal

MUMBAI: Helion Ventures and Sierra Venture Capital are looking to invest in makemytrip.com a travel portal started six years ago and which survived the dotcom crash. Two funds are said to be in the final stages of negotiation with the founders and investors for funding the company for its next round of growth.

The total investment in the second round may be around $12m (around Rs 55 crore) it will be announced in two weeks. In May ’05, SoftBank Asia Infrastructure Fund (SAIF) had pumped in $10m into makemytrip to finance its India launch using a hybrid strategy of organic and inorganic growth. SAIF may participate in this round of funding and maintain its shareholding in the company.

Mr Kalra, founder and CEO, makemytrip.com refused to comment on the deal. Ashish Gupta, MD (investment advisor), Helion Ventures also refused to comment. However, it is known that a year ago Mr Gupta invested around $1,00,000 in his personal capacity in the company. With this, Mr Gupta holds a minority stake in the business.

Norwest Venture Partners (NVP), Kleiner Perkins, Caufield & Byers and Westbridge Capital have also pumped in millions of dollars into the travel portal business in India. The models are not new. Others like Expedia.com, Travelocity.com, Indiatimes.com and Cheaptickets.com also have similar models.

In a sense the fragmented nature of the Indian travel landscape, with airlines popping up, hotels mushrooming and zillions of travel agents waiting for consolidation seems ideal for an online model.

The Indian online travel business is said to be around $70m in ’05 and is expected to jump to a whopping $332m in ’06.