Ixigo co-founder reveals how tough times ensure resilience and why the travel sector is sure to bounce back
Aloke Bajpai, Co-founder and CEO of ixigo, talks to Siddharth Ahluwalia about the journey and growth of his travel startup, the lessons they learnt from the 2008 financial crisis, and why the battered sector will stage a recovery.
Aloke Bajpai believes he is “building the future of mobile travel”.
The founder of leading travel marketplace ixigo began his journey at IIT-Kanpur and went on to pursue his master’s in business administration from INSEAD. After holding key positions with various companies in the domains of product and technology, he stepped on to the entrepreneurial path in 2007.
Aloke launched ixigo, a travel startup, to help people organise, book, and track trips, with Rajnish Kumar.
Ixigo started out as a content and utility platform for trains and flights. People could search the best deals on flight tickets, verify PNR status, and look up train status, schedules, routes, platform numbers, and other meta information.
Under Aloke’s leadership, ixigo has evolved from a bootstrapped startup to one of India’s most popular travel search and planning businesses. It now has more than 20 million active users per month across the mobile application and web platforms.
A TiE charter member, Aloke has also mentored and showed the way to several startups and accelerators.
In the recent episode of 100x Entrepreneur Podcast, a series featuring founders, venture capitalists, and angel investors, Aloke spoke to Siddharth Ahluwalia about the growth of ixigo, building content around travel, and the lessons he learnt from the 2008 financial crisis.
The initial phase
Ixigo kicked off as a meta search engine for travel, and over time developed into a marketplace and then an OTA. In 2019, ixigo began providing utility services across a slew of train, flight, bus hotel verticals. It now claims to cater to the travel needs of over 150 million Indians a year.
According to Aloke, ixigo’s biggest USP is the organic growth of the platform, primarily through word of mouth – famously known as zero-dollar marketing.
“We’re very proud to have disrupted the category by proving that large travel apps can be built by focusing mainly on product and content,” Aloke says.
The travel startup also stands out due to its quirky videos on social media, with content and storytelling techniques designed to connect with customers. For this, ixigo’s team, led by Aashish Chopra, spends an immense amount of time researching, brainstorming, and coming up with multiple iterations before “finalising the right one”.
One of the startup’s recent videos highlights some of the things that should not be picked up from a hotel while checking out. It was released after an Indian family was caught carrying items they should not have from their Bali hotel room. The news peg led ixigo to revamp and published its old content; the video went viral overnight.
Surviving the 2008 economic downturn
Ixigo was barely two years old and had raised a small seed round when the 2008 financial crisis hit India. The startup was then set to expand, amp up hiring, and seek funds from a large VC investor.
All their plans crashed; the startup’s term sheet was also cancelled. They had three months of cash left in the bank with hardly any revenues to bank on. The startup did not know when the funding environment would improve, but decided to work through the crisis.
“Rajneesh and I were very transparent. We spoke to employees, told them about our cost breakup for rent, salaries (which amounted to 80 percent of the expenditure), and servers. Instantly, a junior engineer suggested that everyone work without getting paid for a few months to stay profitable. Subsequently, the entire team agreed,” Aloke recalls.
ixigo decided to implement a pay cut and reverse it once revenue began to pick up. The startup operated without paying salaries for almost nine to 10 months. All 25 employees stayed with ixigo for more than three years after this crisis; many have now become entrepreneurs.
“I am not surprised, because if people go through such tough times, they develop the resilience to start out on their own and make a mark,” Aloke says.
Navigating the COVID-19 pandemic
Aloke says, “In FY20, we grew to Rs 160 crore in revenue with very negligible losses. In terms of GMV, ixigo was very close to 400 million per annum. Then of course, COVID-19 hit us and everyone else in the industry.”
When India announced a lockdown in March this year amidst the coronavirus pandemic, ixigo’s revenue went down to zero for a few months like many other travel companies. However, the startup recognised customer pain points and began catering to them.
The startup observed that many people were still looking for accurate information when the lockdown was declared.
“What happens to bookings made for future dates? How can state e-passes be obtained? These were a few questions to which people were seeking answers. So, we, at ixigo, were busy collating this information and creating what has now become our COVID Centre, where we disseminate all related information and know-how,” Aloke explains.
Ixigo also launched an AI chat bot called TARA where people could put in their refund queries for future bookings. This proved very useful as many of them could not connect with the concerned airlines or their call centres.
“So, even though transactions were not taking place, ixigo had about 30 to 40 percent of usual traffic.” When the lockdown was eased a bit, some people began traveling either for an emergency or to get home to their families.
Aloke is expecting travel to pick up during Diwali. He is also of the opinion that “people will begin taking trips like never before when things get back to normal”.
“Most people have been home for many months. Their savings have gone up; this reflected in the stock market momentum as well. So, travel will bounce back in the next six to 12 months. For the time being, millennials are looking to take workations to states like Himachal Pradesh, Karnataka, and Goa where there are no quarantine restrictions unless someone is symptomatic,” he says.
Ixigo is confident of ending this financial year on a profitable note and regaining its pre-COVID position due to the increase in traffic and unit economics. The founders are considering a public offering two to three years down the line, once they earn “sizeable revenue”.
Edited by Teja Lele