INDIA BUSINESS WORLD - JUNE 2006
THE MONTH THAT WAS...

CLEARTRIP.COM GETS $3 M FROM TWO VC COMPANIES

  CLEARTRIP.COM, a new travel dotcom venture, has received funding from two silicon valley venture capital (VC) firms — the Ram Shriram-promoted Sherpalo Ventures and Kleiner Perkins Caufield & Byers. According to industry sources, the dotcom venture has received about $3 million (around Rs 13.8 crore).

The money that cleartrip.com has raised will be used mainly for its operations over the next two-three years. A cleartrip.com spokesperson didn't comment, when contacted.

But sources said VC financing would increase after two years once the operations build up a certain amount of scale. Cleartrip.com will commence operations in India next month, but it has been in stealth mode for nearly eight months.

Cleartrip.com is co-promoted by Hrush Bhatt, who was a consultant to Thomas Cook's e-commerce venture. The other promoters include Mathew Spacie, former Cox and Kings COO and Stuart Crighton, formerly with Abacus Distribution Systems in South and West Asia . Heading the venture will be Sandeep Murthy, who joins cleartrip.com from Interactive Corp, which owns dotcom properties like Expedia, Match.com, Gifts.com, amongst others.

Cleartrip.com becomes the latest dotcom venture in travel e-commerce to receive VC funding in recent times. Last year, the Deep Kalra promoted makemytrip.com raised nearly $10 million (aro und Rs 46 crore) from SoftBank Asia Infrastructure Other travel dot-Fund. coms that have received VC funding include Travelguru.com, which received funding from Westbridge and Yatra.com, which has been funded by Norwest Venture Partners (NVP), TV-18 and Reliance Infocomm. Yatra.com isn't likely to raise a second round of funds, but will continue to receive funding over the next few years from VCs and investors till the revenue stream kicks in.

Meanwhile, Mr Murthy told ET that cleartrip.com's revenues would come in predominantly from commissions by selling airline tickets, which presently stand at 5% of the overall ticket value. Cleartrip.com has tied up with 90% of domestic airlines to sell tickets online, and has a network of nearly 900 domestic hotels. Over time, it plans to add packaged tours and other value-added services to the website, which could garner margins of 15% upwards.