When Aloke Bajpai and Rajnish Kumar began building travel search engine Ixigo in 2007, they focused on helping Indian travelers compare prices for airfares.

But in 2014, Ixigo’s co-founders tweaked the business model, launching a separate app for information on intercity trains in India. It later added ticketing for trains plus cross-selling for buses, cabs, hotels, and flights.

The switch to a rail focus, which is almost unheard of among travel-metasearch companies, has delivered gains. Ixigo grew its revenue 70 percent year-over-year to $17 million during the financial year ending March 31, according to numbers it shared with Skift.

The company also doubled year-over-year its revenues from commissions on transactions, separate from its business of selling advertising and other services.

“Ixigo is on a clear path to profitability this fiscal year,” said CEO Aloke Bajpai. As context, no other Indian online travel company was profitable last year.

ixigo cofounders aloke bajpai

Ixigo’s co-founders CEO Aloke Bajpai (left) and chief technology officer Rajnish Kumar at the company’s Gurgaon, India, headquarters.

Organic, Rail-First Approach

Saving on marketing costs is perhaps the biggest benefit for Ixigo by pursuing a rail-first approach. While many companies spend heavily on buying ads on Google, Ixigo spends little.

“We don’t do paid-search campaigns,” said Kumar. “Most of our traffic comes organically.”

Unlike other travel players, Ixigo went big on intercity rail booking. In 2014, it created a separate mobile app that focused on providing information for intercity rail.

The critical point is that it only added train ticketing last year. The startup instead prioritized providing useful content to rail travelers. The focus on utility rather than transactions earned it word-of-mouth popularity.

The startup aims to cross-sell hotels to its existing customers. It is ramping up its hotel inventory, adding 1.5 million hotels through expanded partnerships with Booking.com, Cleartrip, and Expedia.

Ixigo grew the gross bookings it sold by 2.3 times to $226 million (1,584 crore rupees) during the fiscal year that ended in March. It expects that next fiscal year’s gross merchandise value will be about $500 million.

Rail Traction

Ixigo said it attracts 3 million daily active users to its apps, which users have downloaded 130 million times. As context, consultancy Sensor Tower reports that the Ixigo trains app is one of the 10 most-downloaded apps in the travel segment worldwide beyond apps like Uber, Grab, and Google Earth. All such rankings are based on incomplete data, but they give a sense of how popular Ixigo is.

Ixigo’s engineers found workarounds to common problems plaguing train passengers.

Case in point: Internet connections are spotty on trains, so Ixigo found ways to make its app work offline. Its Android mobile app users can see status details and route information for other trains, even when internet access is unavailable.

The company triangulated data from other sources besides live satellite signals to be able to give more accurate reports on the location of trains than the state railway company could provide. It has also used artificial intelligence to improve the accuracy of predicting train delays.

Another problem: When customers choose to cancel tickets, refunding money can take days. Ixigo instead began placing a hold on credit or debit card accounts and only withdrawing the money when a trip becomes certain. The company also created a digital wallet so that customers can choose to save refunded money in an Ixigo account that the customer can use to pay for future purchases. The 150-employee startup also sped up customer service by supplementing human agents with a chatbot.

To engage with customers more frequently, Ixigo began offering video content for customers to download while they have internet access to view offline during long train trips. This entertainment library has boosted the average user interaction with its app to more than two hours a month.

India’s trains are often overbooked, and the state railway waitlists approximately 10 percent of customers on any given trip. Ixigo can upsell these customers on buses or flights.

Instant Booking Surprise

“In the past year, we’ve gone from being metasearch toward becoming a hybrid between a marketplace and an online travel agency,” said Bajpai. It acts as an online travel agency for train ticketing, for example.

For flights, the Ixigo trains app creates a user experience that makes it feel to a customer that Ixigo is an agency because the customer isn’t referred elsewhere to complete a booking.

In the fiscal year ending in March, 97 percent of domestic flight bookings in the Ixigo trains app were done via this so-called facilitated model. From a user’s perspective, all the booking steps, including the payment page, remain in Ixigo’s user experience.

Sometimes the supplier or online travel company hosts the custom payment page with a custom deep integration. In these cases, the partner collects payment but allows for Ixigo-specific promotions such as the ability to redeem or earn Ixigo promotions and vouchers.

Some foreign bookings also work in this way. In test searches for U.S. and German flights via the app, we could complete bookings on airlines like United and Lufthansa while remaining in Ixigo’s interface.

To be sure, other metasearch players like Google, Kayak, and Skyscanner offer so-called facilitated booking, too. However, Ixigo is rare for having nearly all of its flight bookings for domestic ticketing be instant. It made this change because mobile-first Indian shoppers found it jarring to click off to other sites to complete a transaction.

It is now adding instant booking to hotels. Notably some listings from Expedia and Booking.com are appearing via its facilitated booking interface where customers remain in the Ixigo interface to complete payment. It’s almost unheard of for the global companies to allow another brand to handle its transactions in that way.

Ixigo’s Kumar said that, thanks to its rail effort, it’s reaching customers in smaller Indian cities that global companies haven’t yet spent marketing money on yet. So it’s more cost-efficient for the global players for now. It sells about 1.2 million passenger tickets and lodging reservations a month, providing it opportunities for additional cross-selling to come.

On the airline front, Ixigo launched an effort earlier this year to try to tighten its ties with airlines by debuting a new business-to-business subsidiary called Travenues, which offers digital selling tools. Its marketing automation platform will go live with its first customer soon, which the company says is a leading low-cost carrier in India.

“Most airlines suck at providing online experiences for consumers via their sites and apps, at least compared with the state-of-the-art user interfaces from online travel companies, and we aim to bridge that gap for carriers on a white-label basis,” said Bajpai.

Ixigo has disclosed raising $26 million in funding to date. One of its backers is the venture capital arm of Fosun, a Chinese investment group that has been broadening its travel portfolio. MakeMyTrip, India’s largest online travel company, is also a backer. Learn more in Skift’s deep dive “What India Reveals About the Future of Online Travel.”

“Travel transactions will become commoditized via competition,” said chief technology officer Kumar. “So it’s imperative to offer a differentiated customer experience that solves all the small pain points. That’s the hard stuff we’ve worked on that others have ignored, and that has given us an edge.”

Photo Credit: An illustration of how consumers can use the Ixigo trains app to overlay a digital image and discover which train car their ticketed seat is in. Ixigo CEO Aloke Bajpai said the startup he co-founded is now achieving rapid growth. Ixigo