Introduction: Ixigo Files for IPO and Takes on MakeMyTrip
Ixigo is India’s second largest online travel agent making more than 500 crores in revenue. The company has just filed for an IPO for a fresh capital of 120 crores and is bringing the fight to the top travel boss MakeMyTrip—which, by the way, was also an ex-investor that made 8x returns by investing in Ixigo.
This is the fourth episode of the profitable series of the GrowthXperiment, and we’ll dive deep into four core strategies that Ixigo used to become the fastest-growing online travel agent—and how they’re beating MakeMyTrip to the punch with a 46% share in the train travel market.
Understanding India’s Booming Travel Market
India has changed in the last couple of decades. Our GDP per capita and disposable income have both increased. In fact, if you look at the private expenses incurred by an average Indian, transportation and hotel is our second-largest expense. This shows that we really care about traveling—even as a developing country.
If you take a close look at the trend in countries like China and emerging economies like Malaysia and Thailand, you’ll see discretionary spending starts growing at a much faster rate when GDP per capita crosses $4,000. The same speed will take place in India as we go around 2028–29.
As that change happens, travel will become a bigger and bigger piece of an expenditure pie as a country. Even today, the travel industry is huge—it contributes a massive 6% to India’s GDP.
India’s internet penetration has been increasing and is now touching roughly 50%. People are buying more tickets than they were earlier. This is the market where the founders Aloke Bajpai and Rajnish Kumar, two IIT batchmates, have managed to make a dent.
Just remember—these two guys created Ixigo in 2007 by leaving their comfortable jobs in France. That is not easy.
Ixigo’s Early Years and Strategic Pivots
Let’s get down to the core insights that they cracked to get here, starting with the first insight: Pivots.
One of the most amazing things about Ixigo is that they don’t fear pivoting. It’s a rare company that has changed its business model thrice in the last 17 years.
When they first started in 2007, they were just a search aggregator. This was a time when companies like MakeMyTrip, Yatra, and ClearTrip together owned 90% of the OTA market. The very first version of Ixigo was both founders trying to create a Google of travel searches in India.
Ixigo was started as a search engine that would crawl across all portals like MakeMyTrip, Yatra, and airline websites to show results of all different travel options to the customers. The customers would then click on these links and get redirected. This worked well for them—they hit 100,000 visitors within 7 months.
They had three revenue sources: pay-per-click revenue after redirecting a customer, ad revenue from selling space on their site, and fees from listing hotel properties. But they realized this wasn’t going to scale massively.
So they pivoted into a planner and information-based model—showing everything from monuments to hotels to restaurants to petrol pumps and even daabas. Ixigo had all of it covered and there was good traffic. But there was a big problem: they were burning money and making massive losses. They had no power over the customer, couldn’t handle payments, or cross-sell anything.
That’s when their final pivot came—in 2019—when they became a complete OTA service provider. Since then, they’ve been following a House of Brands model, much like MakeMyTrip, which has four apps: MakeMyTrip, GoIbibo, RedBus, and RedRail.
Ixigo also has four apps: one for flights, one for buses, and two for trains. And this is where it gets interesting.
Tier 2 and Tier 3 Focus: Capturing the Next Billion Users
Ixigo’s core strategy is their tier 2 and tier 3 focus.
The OTA giants like MakeMyTrip have always used a top-down approach—focusing on Tier 1 cities first. That’s why most of their business comes from flights and hotels, where margins are better (5%–30%).
But railway? It’s a low-margin business—OTAs earn a flat ₹20–₹40 per ticket. So other OTAs don’t prioritize trains.
Ixigo saw opportunity in this low-margin, high-volume segment. Around 61% of their revenue comes from railway bookings—making it their fastest-growing segment. They took a bottom-up approach and went after rural and underpenetrated Indian audiences.
These next billion users (NBU) are internet users from tier 2/3 and rural areas. They prefer trains and buses over flights. These users make up 90% of India’s train/bus segment and 50% of the hotel/flight segment.
India’s flight market is still untapped—only 4% of Indians fly—and flight tickets are 5–10x the cost of train tickets.
Ixigo has nailed its target market. In 2023, 95% of their bookings involved tier 2/3 cities as either origin or destination.
They were also the first official IRCTC OTA partners, helping them scale quickly. One great move was acquiring ConfirmTkt, a highly trusted train booking app that offered real-time info and PNR prediction. ConfirmTkt was selling 30,000 tickets/day with 5 million monthly users when Ixigo acquired them.
Establishing Trust in the Travel Booking Experience
When it comes to the travel industry, the only true USP is trust. Travel involves both money and time.
The IRCTC website has faced issues over time—slow speed or complete outages. When Ixigo became an official reseller, users could book directly through the app without being redirected to IRCTC.
They solved two pain points:
- Uncertainty – Train tickets often come with waiting lists. Ixigo solved this by using AI to predict the likelihood of confirmation using 4–5 years of PNR data. ConfirmTkt helped here as well.
- Refunds – Refunds are usually painful. During the COVID crisis, this was a major issue. Ixigo launched Ixigo Assured, a no-questions-asked refund feature for ₹500. Their average refund time in 2023 was just 2 hours 40 minutes. While others laid off staff, Ixigo doubled down on customer support.
They even launched an offline app that worked without the internet—ideal for train travelers where connectivity is spotty.
Upselling and Cross-Selling: Ixigo’s Revenue Flywheel
Ixigo uses trains as an entry-point to upsell and cross-sell other high-margin services like flights, hotels, and buses.
In 2023, they had 40 crore unique users—a massive traffic count for advertisers.
Once users trust the platform, Ixigo upsells flights and buses and cross-sells services like free rescheduling and Ixigo Assured refunds. These value-added services are affordable and give customers a “safety cushion,” improving conversion rates.
Still, 95% of revenue comes from ticketing, so their core focus remains growing bookings—especially flights, hotels, and buses.
Conclusion: What Lies Ahead for Ixigo
Ixigo has already mastered the train segment. Now, their next big step is to expand their footprint in flights, hotels, and bus bookings—higher margin segments that can skyrocket their revenue further.
Massive kudos to founders Aloke and Rajnish for taking Ixigo public—an incredible milestone for the Indian startup ecosystem. We’re super bullish on founders who are paving India’s growth story.
FAQs: Ixigo vs MakeMyTrip
Q1: Why is Ixigo focusing on trains rather than flights like MakeMyTrip?
Because trains are preferred by the next billion users in tier 2/3 cities. While low-margin, they offer massive volume and customer trust.
Q2: How is Ixigo different from other OTAs in market strategy?
Ixigo uses a bottom-up approach, targeting rural and underpenetrated users, unlike others who focus on metros first.
Q3: What makes Ixigo’s train booking experience superior?
Features like AI-based confirmation prediction, offline app usage, smooth refunds, and acquisition of ConfirmTkt.
Q4: What is ConfirmTkt and why did Ixigo acquire it?
A trusted train booking app with real-time info and confirmation rate prediction. It had 5M+ monthly users.
Q5: How does Ixigo earn revenue?
Mainly through ticketing (95%), but also via ads and premium services like Ixigo Assured refunds and free rescheduling.
