HolidayIQ CEO on the firm's merger and demerger with Wego, latest round of funding and future plans
Three years ago Bangalore-based travel information and review portal HolidayIQ announced a merger with Singapore-based OTA (online travel agent) Wego. The merger came unstuck last week and HolidayIQ went on to scoop another round of venture capital funding from existing investors Accel Partners and Tiger Global. Techcircle.in caught up with HolidayIQ founder and CEO Hari Nair to talk about the merger and demerger, what is the firm going to do with the new round of funding and more. Excerpts:
Why did you merge with Wego in 2010 and what prompted the demerger? Is it linked to Wego launching its own India site?
Well, there were two reasons for the merger. As we know, travel industry needs fair amount of capital to operate. When we merged with Wego, both the firms were relatively smaller and we felt it was necessary to stay together to get substantial size. We found some areas where we could work together to grow further. We were significant in terms of reach and audience in India, whereas Wego had a software solution that enabled it to compare prices of various travel destinations in the markets. We decided to tap the capabilities of each other. We had the advantage of Wego's technology while Wego utilised our vast Indian audience base. Hence the merger.
Now, both companies have grown big and found their own spaces in the market. So we demerged. It was a strategic call, as both thefirms are capable of independently reaching the scale and gaining traction. However, we would continue the collaboration through contracts. Wego had already launched its Indian site about six months ago.
Why would a holiday information site need the kind of money you have raised in the latest round? Where are you going to use the fund if you are not getting into your own transaction-based online OTA?
We are going to use the funds in four key areas â€“ marketing, product development, scaling of our recently launched 'hiq!PAD' programme and talent acquisition.
We get around 4.5 million visits per month and we reached this scale with very little marketing initiatives, as major part of the site traffic came through direct marketing, word of mouth referrals, etc. Now, over the next 24 months, we will aggressively look to market our products to become a stronger player in the industry, leveraging mainly the online marketing platform.
Two months ago, we launched an innovative transportation product that provides information regarding various mode of transportation to Indian travellers. India is a very large country so it is hard to find a suitable mode of transportation to certain remote tourist destinations. Our new product can suggest the mode of transportation. All these contents come from our users.
We will also use a part of the fund to scale our hiq!PAD programme launched recently. This is aimed at encouraging and increasing Indian travellers to post hotel reviews on the device. We target 5000 hotels pan-India by April 2015. We are already running a pilot with 100 hotels in Goa. hiq!PAD is a tablet device provided to the hotels wherein the guests can post their reviews. The reviews will immediately reach us. The cost of installation of device per hotel is between Rs 15,000-Rs 20,000.
We are also ramping up our employee base soon.
What is your revenue model? How much revenue have you generated so far?
We bring consumers who want to travel to various destinations across the globe to our site and convert them to the customers of our partners. Our revenues come mainly from online travel agencies, traditional travel agencies and hotels. When a user comes to our site and if he/she likes some hotel, then they can compare the prices of that hotel with multiple travel agencies, such as MakeMyTrip, Expedia etc. Travellers can do the price comparison through our portal and also book tickets. We have tied up with 50 travel agencies in India and globally.
We can't disclose the revenue figures. However, we double our revenue every year and have doubled it in the last five months.
In effect you seem to be trying to do a Tripadvisor in India. What differentiator can u bring since Tripadvisor already has a good presence in the country? There are also other domestic firms trying to do a review similar to HolidayIQâ€¦
Our position is very simple. We focus only on day-to-day travellers. We build all pieces of information regarding holiday destinations and hotels in India and abroad, and bring that to our users. We have significant amounts of definite requirement in India itself. Besides, our new transportation product is our differentiator.
What is interesting is that all the content and reviews for HolidayIQ come from Indians. Suppose you want to go to Singapore and stay in a particular hotel, you will get the review of that hotel posted by Indian travellers, as the reviews of all major hotels are there on our site. All reviews are done by Indians. Indian travellers are looking for reviews done by their fellow countrymen and this helps them take a good decision
What are the other new features or additions that you are working on?
We have more content on domestic tourist destinations. Now, for the next 12 months we will do international content.
We also see Singapore and Indonesia sites of HolidayIQ. When were they launched and what's the traction from there? Is it also one of the reasons for breaking off from Wego?
We wanted to understand what capabilities we can do outside India. There is a significant market in emerging countries, like Indonesia and Singapore, similar to India. We launched our Singapore and Indonesian sites a few months ago. The response is so good so far. However, we haven't done any marketing initiatives.
What next for HolidayIQ? Any new revenue streams are you looking at? Where do we see the firm 2-3 years down the line?
We have just launched a hotel advertising product. Typically, hotels spend a lot of money on advertising and still it doesn't reach the target audience. Now, we have come up with a solution for them to advertise with lesser cost. The ad will be delivered only to those who are going to a tourist destination where this particular hotel is situated. This way, they can reach their target audience with less advertising cost.
We want to become the advisor of choice for every Indian traveller in the next couple of years.
(Edited by Prem Udayabhanu)