For travel portal ixigo, going public is the best option as it not only gives exits to investors but also allows customers and other stakeholders to hold shares in the company and grow with it, cofounder Aloke Bajpai told ET in an interview.
Bajpai, along with cofounder Rajnish Kumar,
recently won in the Comeback Kid category at the Economic Times Startup Awards 2021.
According to Bajpai, even though ixigo’s private investors were ready to double down with fresh cheques, tapping the public markets will give it a longer runway to access wider capital pools and it would not face liquidity constraints in the long run.
The company has
filed for a $215 million (around Rs 1,600 crore) IPO.
Bajpai said this was reflective of the DNA and culture of the Gurugram-based startup, which has gone through multiple cycles of ups and downs.
“Going by the DNA we built, going public was the best option for us. Even if you don’t want to exit, you want to give exit to your investors. But you want to do it in a way that in the process, you also give the overall market, who are also our customers, an opportunity to play and grow with us,” Bajpai added.
ixigo is awaiting the Securities and Exchange Board of India’s approval to move ahead with the IPO.
“We have been patient long-term builders if you see the way we have built the business. We were never in a hurry to achieve a certain outcome or a certain valuation,” Bajpai told ET.
In August, the company
raised $53 million from investors led by GIC in a pre-IPO round that valued it at $600 million.
ET has reported earlier that the company is
targeting a valuation upwards of $850 million from its IPO.
Since inception, the company has raised $58 million in primary capital from investors across all rounds but has also conducted secondary share sales of $82 million, taking the total to $140 million. This makes Ixigo one of the lowest funded consumer tech startups in India to tap the capital markets.
In a secondary share sale, existing investors sell their stakes, in part or full, to new investors and the money does not go into the company’s coffers.
Bajpai said ixigo was profitable even before the Covid-19 pandemic began, in the quarter ended December 2019 and for the financial year ended March 31, 2020.
“We were operationally breaking-even. So, capital was never a constraint,” he added.
Bajpai, who cofounded the firm 15 years ago, had to survive the two waves of Covid-19 over the last 18 months when travel was one of the worst hit sectors here as well as globally.
Bajpai said even though it was a difficult time during lockdowns in 2020 and 2021, he was sure the company would be among the fastest to bounce back.
He described the start of the nationwide lockdown as a period when the company went through ‘a mini existential crisis.’
“The first few days of the lockdown were very difficult. We were rattled and spent sleepless nights. But then, we were sure that as and when things improve, and the pandemic subsides, travel will bounce back,” Bajpai said.
The company has seen many down cycles and is tuned to be lean, financially prudent and extremely customer centric, he added.
This was one reason why the company did not cut jobs even though its business was hit badly during the lockdowns.
“Both the legs of our business – air and train travel — were suddenly gone. Even during wars, trains have been running, so it was outside our playbook to handle such a situation. But we were clear, we will deal with this with empathy, both towards our employees and customers,” Bajpai said.
Ixigo did cut salaries across the board to be able to absorb the jolt.
“Rajnish and I did not take a single rupee home. Our senior management also took deeper cuts, up to 75-80% of salary being foregone. But we decided to keep everyone and ensure that all hands are on deck when it comes to battling the crisis,” he added.
The company refunded customers the convenience fee it charged for transactions. This, he said, helped customers come to it in hordes when travel opened up.
Bajpai said ixigo is the largest OTA (online travel agency) platform in the country by MAU (monthly active users) and downloads compared to peers who sell air, train and bus tickets.
It competes with MakeMyTrip, EaseMyTrip, IRCTC and Oyo Hotels & Homes, among others.
In terms of recovery in business after the second wave of the Covid-19 pandemic, Bajpai said the gross transaction value (GTV) on Ixigo bounced back to 1.46 times pre-Covid-19 levels in the fourth quarter of 2021.
Bajpai is expecting the GTV to grow manifold by the end of 2022 as travel (both domestic and international) is expected to make a strong comeback by the end of next year.