Startup pitch: iTraveller wants to give a little boost to travel agents
iTraveller provides various tools for travel agents and tour operators to take bookings online, manage inventory and content in the backend, manage leads and accounting.
The customizable product is currently targeted towards travel agents in the Indian market, a sector the company estimates to be worth $1 billion.
iTraveller was launched 18 months ago from its base in Bangalore as a vacation planning portal, enabling travellers to create customized holidays online.
Although the founders had less experience in travel domain, they were keen to look at the holidays segment due to its sheer scale and the extreme fragmented nature. This gave the founders an opportunity to consolidate and automate processes involved in travel agents business.
After a year of launch, iTraveller pivoted from vacation planning portal to an ERP platform for travel agents and tour operators to automate their supply chain.
The startup has raised funding from three sources: bootstrapped to the tune of $50K; angel funding of $125,000, and debt funding worth $40,000. It is also in the process of raising an additional $400,000 from what it claims is a reputable VC.
Q&A with Shiju Radhakrishnan, CEO and co-founder of iTraveller:
Size of the team, names of founders, management roles and key personnel?
Although we had grown to a bigger team of 25 odd members earlier, post pivoting, we shrunk to a smaller team, with just the lean operating structure of founding members.
Key members include:
- Shiju Radhakrishnan, CEO: Engineer & MBA by qualification, posses over a decade of work experience in Wipro, Cognizant and Ashok Leyland before co-founding iTraveller.
- Sanjay Kumar, Chief sales officer: Has over a decade of experience in enterprise sales in education and travel domain. Sanjay is our face to clients. He worked with Career Launcher and iProf before co-founding iTraveller.
- Chitra Parija, Chief operating officer: Gets clients on-board, coordinates among different parties, and manages operations support for clients. She worked for Bharat Matrimony and ICICI, before co-founding iTraveller.
- Anil Sharma, Chief technology officer: Focuses on user experience and technology at iTraveller. Has 13 years of experience working for Microsoft and AlwaysOnVacation.com before cofounding iTraveller.
- Nisanth Kumar, Chief architect: The brain behind 18-month effort of building the backend of iTraveller.
Estimation of market size?
The unofficial estimates on the number of tour operators who are managing the destinations in India are around 100,000. They are fragmented across various popular destinations in the country, having gross sales of anything between $0.1 million to $200 million.
The estimated gross market opportunity is approximately $1 Billion. We are targeting to acquire at least 0.5% of this market in the next five years, for a revenue expectation of around $5 million by 2018.
As far as the direct competition is concerned, there are no national players yet. However, there are some of regional software outfits, which are in the same segment, with some of the common offerings like ours, namely – Tour Mast, Tour Beetle, Easy Packages, Trabacus (pitch here)and Vacation Labs etc.
As far as the indirect competition is concerned, there are many players in different segments:
- Hotel inventory platforms like Axis Rooms, Hotelogix, RateGain and RateTiger
- Lead generation platforms like HolidayIQ, TripCrafters, and HelloTravel
- Vacation planning sites like MyGola, MustSeeIndia, Traverik (pitch here) and JoGuru (pitch here)
Revenue model and strategy for profitability?
The paying clients of iTraveller are the travel agents and tour operators. They use the platform as a pay-per-usage subscription based technology platform and pay based on their monthly usage.
There are five monetizable modules, addressing different stages of tour operator’s value chain, namely – Planner, Leads, Reservations, Client Experiences and Sales.
The monthly recurring charges depend on the usage and it ranges from INR 2,000 ($33) to INR 1,20,000 ($2000) depending upon the number of transactions.
What problem does the business solve?
iTraveller is an answer to the inefficiencies in the value chain of holiday planning industry of India – and largely Asian countries.
For a tour operator, it helps enhancing the revenue and automating the manual process, thereby reducing cost and spike up the profits.
For a traveller, it helps in dynamic booking, transparent processes and a delightful holiday experience. There are over 40 million people working in the holiday packages industry in India, with most of them having no access to process automation or technology. iTraveller is an ERP (a supply chain automation platform) that addresses the tech enablement of this segment.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
iTraveller was started as an online travel portal, focused on customized vacation planning. We dealt with few of the Indian destinations and operated for over a year.
The end objective was to allow travellers to plan and book their vacations online, with minimum or no manual support. However, during this process, we faced trouble in scaling up from the first year revenue of around $0.5 million to higher level because essentially vacations are not well delivered when remotely managed.
We were at the crossroads – not being able to decide on how to scale up. However, as an outcome of operating as online tour operator, we also had ended creating an amazing product platform to automate the holiday packages value chain.
When we were almost at the state of closing down as a start-up, it was couple our franchises who came up with the request to provide them with the product platform alone and suggested us exit from the operational businesses of hotel bookings, client handling etc.
We found there was a great addiction built for the automation platform of our product and there we pivoted from an online holiday planning portal to a cloud based travel technology platform.
From April, 2013, we are operating as an ERP platform for the tour operators, travel agents and hotels and have acquired 30 paying clients, across the country.
As an industry, holiday packages value chain in India (and largely Asia) is highly fragmented. There is no collective automation platform that addresses the lack of automation in this area and operators depend heavily on manual mode of work to accomplish their day to day tasks – be it bookings, hotel reservations, client handling, documentation or payments and billing.
iTraveller’s cloud based technology platform that comprises of five modules can automate the value chain of a tour operator’s business. It’s a plug-n-play platform, with least entry barriers and least cost of operations, due to its pay-per-usage model.
Why should people or companies use the business?
The $120 Billion holiday planning industry (in which iTraveller’s target segment constitutes $1 Billion) in India is 80% offline, depending manpower hugely to deliver the services. They have to get on-board on platforms like iTraveller, because,
- Going online is unavoidable to survive
- Tech-enablement alone can get them competitive in the current market
- Manpower resources are increasingly getting expensive, leading to dependence on technology for process automation
- Client satisfaction benchmarks are going up, forcing them to better use technology and detach from the manual errors/inconsistencies
- To enable all of these, in-house technology development and its maintenance are expensive for most of the SMEs and hence the increased dependence of a platform like iTraveller
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
The past 30 clients that we acquired have mostly been using online channels, where the leads were generated using eMail campaigns, social media updates etc.
Now we are witnessing a good number of reference based, word of mouth publicity, which brings in new leads. Going forward, we expect half of our new clients to be acquired using references & word of mouth.
Of the remaining, we expect part of it to come from already maturing digital campaigns and the remaining through field sales team that we have started deploying in some of the selected destinations/cities where there is a large concentration of travel agents/tour operators.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We expect to achieve a key milestone of 1000 paying clients by 2015-16, across the holiday destinations in India. As far as revenue is concerned, our efforts are to generate around $2 million in revenue, by that time.
The key challenges are:
- Creating awareness on how an automation platform can help a travel agent business. In India scenario, businesses hardly worry about cost optimization due to cheap labour and are concerned only about revenue maximization.
- Getting the clients on-boarded, after they signup. Most of the businesses are run by small teams, where there are not many to sponsor the usage of technology, who become the change agents there. We face trouble in spending hours to educate/train the work force to start using the platform, which is a scalability challenge at the moment
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Travel and tourism as an industry in India is the fourth largest employment industry with nearly 40 million people. In this, around 50% are with travel agents, tour operators and ground handling agents.
However, there is no single ERP or automation platforms available, which can help automating the work force. At iTraveller, we are constantly in pursuit of innovative ways and means to get this segment automated and also bring in operational efficiency.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style… and why?
We can draw distant comparisons with Cleartrip, Amadeus and redBus for our business goals, culture and style.
In India, offline travel transaction forms a big pie in the total travel market, especially a majority of travel/tour agents are offline. In a 10 minute walk in busy streets in the technology-capital of India, Bangalore, one can easily spot about 3-5 travel agencies.
India’s travel market grew by 11% in 2012 and the online travel market increased 15% to $6.9 billion. In India, rail and LCCs drive online travel sales. Now, the hotels and packages market have attracted a lot of attention from many leading online service providers.
So, in India various travel segments are at various level of maturity. Among the travel agents, again there are various levels of technology-enabled agents.
iTraveller banks on the increasing online presence of travel agents with its automation-focused ERP solution. Given the fragmented travel agent market condition, there is a definite scope for iTraveller to web-enable offline agents.
The competition in this space is intense with both local and global players providing their SaaS-based tools to power travel agents, however the pricing of iTraveller is very competitive.
Karthick was general manager for Tnooz in Asia until September 2014.