At 25, MakeMyTrip says best is yet to come, bets on investments, AI to outpace industry growth

As India’s pioneering online travel company, MakeMyTrip, completes 25 years of existence, its founders reckon that their company has made enough investments that will enable it to outpace industry growth in the future. 

“The best is yet to come,” said Deep Kalra, Founder and Chairman, MakeMyTrip, who, along with Co-founder and Group CEO Rajesh Magow, was in conversation with Shradha Sharma, Founder and CEO of YourStory. 

“So the best part of this 25 is that the last 12 months have been our best ever,” he said. “We do genuinely believe that the best is yet to come because of not just MakeMyTrip… (but also) because of where India is, how we are poised, how travel is taking off, we are seeing all of that.”

A slew of positive factors

Magow outlined the reasons for such optimism. “In many ways, the company, the country, is growing,” he said. “We have a demographic dividend. We have infrastructure investments. We have rising incomes. We have disposable income.”

Consumer behaviour is also changing. “Globally,” said Magow, “people are spending more portions of their disposable income on travel and experiences, and not necessarily buying products.”   

The coming in of Gen Z and a rising middle class are “positive factors that will shape the future for India for the next 25 years or more,” he said. “Therefore, the businesses working out of India—including travel—are definitely going to get benefit out of it.”

“One core market is India—it’ll continue to be India. But we’ve gone into the GCC market as well.” Magow spoke about multiple new investments powering the company’s future: “Whether it’s a corporate business, or intercity, or building and scaling up businesses like forex, visa, alternative accommodation, [and] international outbound... We’ve got enough on our plate, which will help us drivea higher rate of growth than the industry.”

And then there is AI, which Magow termed as transformational. He said, “There’s a lot of power in that technology that we can sort of leverage on the application side.” After having started its journey on AI a year ago, he said, MakeMyTrip wants to double down on that. These will pertain to investments specifically focusing on changing the experience for the consumers and also enhancing productivity internally.

A new era is coming up, said Magow. “It’s a huge opportunity. But at the same time … it’s very fast-paced. You will also have new innovations coming from some corner that you've got to be careful about.”

Surviving ups and downs, finding g rowth

In its 25 years, MakeMyTrip has successfully navigated quite a few of such challenges, including what it faced in the very initial years. Kalra described the first five years as “very, very, very tough but very, very, very satisfying.” It was “pure survival.”

At one point, MakeMyTrip had enough resources for just one month of rent and payroll. “It was scary,” recalled Kalra. They navigated it one month at a time. “The tough times got over because we had a couple of people, we had this close team, we could bounce ideas off and share the burden…There was no work-life balance. And it's okay. There's a time to work hard and then it gets better and better because you have other people.”

There was even a time when, facing significant financial difficulties, the founders came very close to selling MakeMyTrip to a company called Zuji. The founders agreed that if they received an offer of $10 million, they would sell the company, and this would allow everyone to make a few million. But the offer stalled at about $8 million. Kalra recalled, “I was relieved that they didn't get to 10. So, in your gut, you knew you actually didn't want to, but you were almost forced to. So, I guess luck's got to be with you, too.”

Magow summed up how MakeMyTrip navigated the ups and downs of the journey, with the company finding growth after every downturn. After the first five years, which were “like a survival thing,” there was a high-growth phase, punctuated by the company's IPO on the Nasdaq—“clearly the high point from that point of view.” 

But, he said, “maybe it was too early that we listed at that point in time.” From an investor perspective, however, ten years was a significant stretch - MakeMyTrip was started in 2000 and went for an IPO in 2010. “It worked out quite well… it gave us some capital and we started growing and kept building the business — new services, new products and so on.”

Then, in the early days, India’s digital ecosystem “really did not exist,” he said. But with the advent of smartphones, better bandwidth, and growing internet access—“the pillars of the digital ecosystem”—growth accelerated, supported further by capital inflows.

The 2016 merger with Goibibo and RedBus was another major turning point. “We were definitely not ready for a big acquisition at that point in time,” Magow admitted. “But the circumstances… forced us to do it, and then we had to make that work.” It took “really hard work for two-three years” to integrate the companies.

Post-COVID-19, the company focused on rebuilding and strategic planning. During COVID-19, the challenge was to keep the tech team gainfully employed. And it was during this time that its ad tech business came into being. The company also helped develop the government’s contact tracing app Aarogya Setu. “We emerged stronger,” he said, adding, “It feels even more exciting because India is now at the cusp of the next wave of growth.” 

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The incumbency risk

Magow is unfazed by short-term uncertainties. “You will have short-term cycles... I'm not bothered about that because now the cycles are becoming more frequent and shorter. If wars are becoming BAU these days, then some of the uncertainty and some of the cycles have to become part of BAU as well.”

He is aware of the need to be on one’s toes in the AI era; there is risk in not being able to spot new innovations that are coming up from some corner or the other. “When you are incumbent and you are the market leader and you are a reasonably large company, that becomes one of the risk elements, right?”

Magow said, “You've got to keep up the pace… invest in the right areas. And make the difference with the differentiation that you have, which is the data, and then keep on delivering to make sure that you stay ahead of the curve.”