iTech Capital invests US$ 10 million in AviasalesFeb. 11, 2014 The fund has invested USD 10 million in Russia’s biggest online travel search engine, buying a minority stake in the company.
iTech Capital’s Managing Partner Gleb Davidyuk and Investment Manager Ilya Balandin have become members of the Board of Directors. The money will be spent on developing the service, expanding the team and promoting key products.
Aviasales is a leading travel search engine for flights and hotel bookings in Russia. The service helps users compare airfares and hotel options from dozens of travel sites. Then they are redirected to the airline or OTA website to pay for the booking.
Every month Aviasales receives more than 4 million unique visitors who make over 500,000 search queries for tickets every day, comparing prices of more than 100 ticket agencies and over 60 carriers - both regular operators (Emirates, Air France/KLM) and lowcosters (Ryanair, easyJet). Developing a mobile version of the service is an important part of Aviasales’ strategy. About 27% of queries are made from smartphones and tablets, while the average bill for such orders is almost 10% greater than for web customers. Over 1.5 million devices use the Aviasales app, in addition to Alcatel, Qumo, Texet and other phones where the app is pre-installed.
“Aviasales is a very popular service that lets people compare flights and hotel offers quickly and easily from various sources, including airline and hotel sites,” comments iTech Capital’s Investment Manager Ilya Balandin. “By investing in Aviasales, we expect synergy with our other online marketing and booking assets to improve growth.”
The funds invested will be spent on developing the firm’s key products: the Aviasales Russian search engine and its international counterpart, JetRadar, a Thai version of which was launched recently, as well as the Hotellook hospitality project and Travelpayouts affiliate network.
“Partnering with iTech Capital will allow us to keep up the growth pace on a highly competitive market. At the moment Aviasales is growing by more than 100% a year. It is a major Russian search service in the travel sector, successfully competing with foreign projects,” says Konstantin Kalinov, founder of the service.
The company employs about 80 members of staff. Aviasales’ HQ is on the Island of Phuket (Thailand). International expansion is a priority for the company, which already works on 13 foreign markets under the brand name JetRadar. More than 1 billion fliers use JetRadar every year. JetRadar exerts the most active presence in the United Kingdom, Germany and Australia.
According to the Federal Agency of Air Transport, the Russian passenger air travel market grew by 14.2% in 2013 to more than 84.5 million fliers. Some RUB 240 billion worth of online tickets and hotel reservations were sold, and the sector’s growth is estimated at 40% (Data Insight).
IATA’s forecast for 2014 is also positive. Last December the Association increased its original forecast of carrier profits by 9%, which means better revenues for all market participants. Search engines are a vital part of the ticket sales industry. In 2013, large companies such as Amadeus, Sabre and others offered IT solutions for meta projects - a clear confirmation of the importance of Aviasales and similar products for the global distribution of air tickets.