Traveltech major MakeMyTrip has acquired a majority stake in intercity cab service provider Savaari Car Rentals to expand its offerings.
Savaari will continue to operate as an independent entity, led by its existing leadership team, following the acquisition, the companies said in a statement.
Founded in 2006, Savaari is an online cab aggregator which provides intercity and car rental services. The company, which was backed by the likes of Athera Venture Partners and Intel Capital, claims to have a presence in over 2,000 cities across India.
Commenting on the acquisition, Savvari founder and CEO Gaurav Aggarwal said, “We are now looking to transform this space by leveraging technology as well as deeper consumer understanding from MakeMyTrip. The timing of the acquisition couldn’t be better, as it coincides with the improved road infrastructure in the country and a wider acceptance among travellers to book intercity cab services online.”
The acquisition will help MakeMyTrip further expand its offerings for intercity road travel. The online travel aggregator already has a presence in intercity bus ticket booking space through redBus.
“The intercity cab service remains largely offline, with low online penetration, fragmented supply, and a lack of standardisation in service. We have encountered similar issues in intercity private bus transport where we now have a leadership position through redBus. With this majority stake in Savaari, we seek to extend that leadership to adjacent segments in ground transport,” MakeMyTrip Group CEO and cofounder Rajesh Magow said.
He added that redBus CEO Prakash Sangam would work closely with the leadership team of Savaari to scale the business to new heights.
With this acquisition, MakeMyTrip is eyeing a big share of the Indian car rental market, which was pegged at $2.9 Bn (about INR 24,000 Cr) in 2023. This market is expected to clock a CAGR of 5.5% between 2023-2028 to reach a size of $3.8 Bn (about INR 31,581.61 Cr) by the end of this period.
Zoomcar, which provides cars on rent for self-driving, listed on Nasdaq last month. Earlier this month, it appointed former Flipkart executive Adarsh Menon as its president.
Meanwhile, MakeMyTrip posted a net profit of $24.2 Mn in the December quarter of 2023-24 against a profit of $0.2 Mn in the year-ago quarter. Operating revenue grew 26.9% to $214.2 Mn during the quarter from $170.5 Mn in Q3 FY23.
The Indian car rental market was valued at $ 2.9 Bn ( INR 24,101 Crore) in the current year, and it is expected to reach USD 3.8 billion, projecting a CAGR of 5.5% during the forecast period (2023 – 2028).
“Prakash Sangam, CEO of redBus, will lead this initiative from the MMT group’s perspective and work closely with the leadership team of Savaari to scale this business to new heights.”
It is estimated that 34% of the overall population in India are millennials, which serves as one of the largest millennial populations across the globe. It is anticipated that the millennial population will contribute 50% of the overall population by the end of 2030. Due to the high cost of owning personal vehicles, millennials prefer availing of car rental services. This in turn is projected to propel the market in coming years.
Savaari with its inception in 2006, claims to have a presence in over 2000 cities across the country. Its services include Outstation Oneway drops, Outstation Roundtrips, Hourly Local Rentals and Airport Transfers. Savaari went through its latest Series B Funding Round of $262K on Mar 28, 2022. The company was valued at $26.8M as of Mar 28, 2022, according to tracxn.com.
MakeMyTrip Limited (Nasdaq: MMYT) founded by Deep Kalra in 2000, is an online travel company. The company own and operates well-recognized online brands, including MakeMyTrip, Goibibo and redBus.
Its services and products include air ticketing, hotel and alternative accommodations bookings, holiday planning and packaging, rail ticketing, bus ticketing, car hire and ancillary travel requirements such as facilitating access to third-party travel insurance and visa processing.
Recently released FY24 Q3 results of MakeMyTrip mark a net profit of $24.2 Mn up from $0.2 Mn profit posted in the corresponding period of last year on strong travel demand in India.
MakeMyTrip’s operating revenue rose 26.9% to $214.2 Mn in Q3 FY24 from $170.5 Mn in the year-ago period, with the hotels and packages business contributing the highest.
The company’s revenue from the hotels and packages business increased 21.5% to $125.5 Mn in the reported quarter from $103.3 Mn in Q3 FY23.
The post MakeMyTrip Acquires Majority Stake In Savaari To Enter Intercity Cab Market appeared first on Inc42 Media.