Travel M&A begins: Flipkart to buy Cleartrip in distress sale

Marking the beginning of mergers & acquisitions in the pandemic-hit travel sector, Flipkart is acquiring online travel aggregator Cleartrip in a distress sale.

The e-commernce major on Thursday announced its decision to buy 100 per cent of Cleartrip's shareholding. The deal could be a mix of cash and equity and will see Cleartrip valued at $40 million.

Cleartrip had raised $75 million so far and was reportedly valued at $300 million in 2016. Concur Technologies, DAG Ventures and Gund Investment are the key investors of

Cleartrip, which reported revenues of Rs 319 crore and loss of Rs 14 crore in

FY20, according to Tofler. Cleartrip will continue to operate as a separate brand, retaining all employees while working closely with Flipkart to further develop technology solutions to make travel simple for customers.

Cleartrip, founded in

2006, has been competing with MakeMyTrip, Yatra,

Ebix, and Booking.com. Most of the online travel aggregators have been suffering losses even before pandemic due to heavy competition and thin margins. The pandemic further hit the travel as well as hospitality industry badly. According to HVS Anarock, these industries will increasingly witness mergers and acquisition in 2021 owing to the financial stress.

"The Flipkart Group is committed to transforming customer experiences through digital commerce. This investment will help strengthen our wide range of offerings for customers," said Kalyan Krishnamurthy, CEO, Flipkart Group.