[The Turning Point] How absence of capital and a timely pivot led Bhanu Chopra to start the first SaaS company to head for an IPO in India

It’s raining IPOs and the latest raindrop to hit the ground running is travel and hospitality Software-as-a-Service (SaaS) company RateGain. The first SaaS player to list on the Indian public markets, RateGain launched its Initial Public Offering (IPO) earlier this week. 

Noida-headquartered RateGain provides hotels with a SaaS platform for revenue management, reputation management and online distribution, Interestingly, it was started in 2004 by entrepreneur Bhanu Chopra as a direct-to-consumer price comparison website, but evolved into an end-to-end cloud-based platform for enterprises, which turned out to be the turning point for the company.

Currently, the platform also works with airlines, Online Travel Agents (OTAs), meta-search companies, vacation rental and package providers, car rental companies, and others.

By listing on the bourses, the company aims to fuel its inorganic growth, strengthening its capabilities with Artificial Intelligence-powered technologies and acquiring capital equipment for Data Centre. 

The eureka moment

Bhanu completed his master’s degree from Indiana University, Bloomington, USA, in Finance and Computer Science, and began his career with Deloitte Consulting, Chicago. Bhanu is a veteran in the Indian startup ecosystem and possibly one of the earliest founders on the scene. He’s also been an investor with the India Angel Network. The techie spent a significant part of his lifetime in the US - first as a computer science student, and later, consulting Fortune 500 companies on their tech strategies.

“My consulting job required a lot of travel to the US and Europe. So, I was always looking out for the best travel deals,” said Bhanu in a conversation with YourStory earlier. As a second-generation entrepreneur, Bhanu identified an opportunity in the increasing popularity of Online Travel Agencies (OTAs) in the early 2000s, and the resultant shift in dynamics in the hospitality space, and founded RateGain in 2004.

At first, RateGain began as a direct-to-consumer price comparison website that Bhanu bootstrapped. But he recalled that in the absence of capital, the startup at that time couldn’t spend the kind of marketing money that was needed to gain eyeballs. “Hence, we pivoted to B2B within three months of our launch,” he shared.

That turned out to be one of the best decisions, with the company turning profitable within a year of operations, he said. Its first client was Expedia, the American online travel shopping company. Later, other online travel agencies (OTAs) that were looking for price comparison technology signed up as well. 

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Additionally, a large undisclosed US tech company became its “channel partner” and white-labelled RateGain’s product under its own brand name. “That got us quick exposure to the travel industry, and we reached 30,000 hotels soon,” Bhanu revealed in an earlier chat. Other clients of RateGain include airline operators like Indigo, GoAir, SpiceJet, Singapore Airlines, OTAs such as Trivago, Booking, Expedia, Cleartrip, and many others. The company currently sells software in nearly 150 countries, and in the Founder’s own words, aims to become the “Zoho for hospitality and travel”.

Today, RateGain is a pure-play SaaS platform, with services including AI-driven revenue management, price intelligence, demand prediction, frictionless distribution, and real-time guest experience management for travel and hospitality clients. 

Over a period of 16-17 years, RateGain has become one of the leading distribution technology companies globally and is the largest Software as a Service (SaaS) company in the hospitality and travel industry in India. It operates through three business units of DaaS, Distribution and MarTech.

RateGain’s customer base of more than 1400 clients includes eight fortune 500 companies comprising both travel suppliers and travel intermediaries including airlines, hotels, cruise lines, car rental companies, online travel agents, tour operators and wholesalers. Its customers also  include 25 out of the top 30 OTAs, several of the world’s fastest-growing airlines, 23 of the top 30 hotel chains, tour operators and wholesalers, leading car rental companies, and the largest travel management companies.

Now with its IPO,  RateGain Travel Technologies has received a strong response from the investors of Dalal Street, with its IPO being subscribed 17.41 times on the last day of bidding.