2017 will be an acid test for travel tech startups: Travelyaari's Lama
For the travel tech industry, 2016 was a year of initiatives and optimisation, and 2017 will be a year of innovation, says Aurvind Lama, co-founder and CEO, Travelyaari, a bus ticket-booking portal.
Lama believes there will either be a lot of mergers in 2017, or companies will get wiped out upon failing to scale up: "2017 will be the year of acid test, where companies will find themselves in a tough environment. Those who focus on their products and internal processes will pull it off. You'll see companies focussing heavily on product innovation to scale up."
Travelyaari was founded in 2007 by Lama, Prateek Nigam and Parthasarathi Sinha, and it raised $7 million in its Series B round in August 2016.
In a conversation with TechCircle, Lama talks about his outlook for 2017, Travelyaari's growth plans and the overall travel tech industry. Edited excerpts:
What are your views on the overall travel tech industry?
The government's recent initiatives, such as demonetisation, have given customers more reasons to use online platforms. I believe this year will see a new travel segment getting more focus. If you look at the whole travel history, railways have already been organised, and so have been hotels and the bus space. 2017 will see 'tours and activities' getting optimised, especially since it's very complex, bundled product.
2017 will also be a year of end-to-end service.
It's been four months since you last raised funding. How have you deployed the funds?
We are deploying them in product development, brand-building, marketing activities and team-building. However, we're still left with the chunk of it.
Tell us about the number of transactions on Travelyaari and month-on-month growth.
If you look at the backend, we probably see 1.5 lakh-1.7 lakh tickets getting booked a day, depending on seasonality. The distribution and sales platform is doing around 30,000 seats a day. It's a tiny space so we can't really compare month on month. Year on year, we are growing at 100%.
How many bookings are done through the mobile app?
The mobile app has started contributing around 75% of the traffic. The rest is through the website.
What is your revenue run rate?
Our sales for 2015-16 are around $100 million, and I think our net revenue will close at $5 million for the financial year 2016-17. We're maintaining 100% growth rate. For 2017-18, we're targeting $10 million in net revenue and $200â€“250 million in sales.
Travelyaari will break even in financial year 2017-18.
What is the leading category on Travelyaari? Are you planning on diversifying?
Bus is our oldest and leading category, but the tours and activities category is also catching up. We would like to stick to what we do. Our core competency is to look into an unorganised industry and deploy the product to streamline it. So, our next focus will be on tours and activities given it's not very organised.
Last year, you had planned on developing the hotel vertical. What happened to that?
The next thing we'll work on is hotels and cabs; also, we're pushing more products into the bus network. The idea is not to build a hotel inventory like others are doing, but to aggregate the inventory from different aggregators and then provide it to bus travellers. It is a demand-based approach.
Customers are coming to operators' outlets and our website, so it is more about providing convenience. We are making provisions so that an operator/our agent can provide end-to-end experience to the traveler.
What, according to you, is the next big disruptor in the travel tech market?
I think mobility solutions, which we're working on, will disrupt the whole industry. Not only at the inter-city level, but even intra-city as well.
With this product, we're building an app for the buses, for the B2B market (transporters). The moment the bus drivers are on the platform, we can take it to customers as well. It could be big, and we're the only ones who are doing it. We already have it in the beta space and the transporters are using it. We'll be releasing it pretty soon.
Second, we're working on dynamic pricing. The third feature is called 'wish pricing', where the customer asks for a price and negotiates with the bus operator on the platform itself.
These three features will be big disruptors, creating a lot of value for the customers and transporters. Apart from that, streamlining the whole 'tours and activities' segment can change things. The only way forward for players is to invest in product innovation and serve the customers better.
It is very difficult to foresee the product people will need tomorrow and then build it.