IBEF: July 14, 2020
Mystifly, which offers payment processing and airline inventory management software to both online and offline travel aggregators, raised US$ 3.3 million in its pre-Series B round led by Japan-based Recruit Holdings Co. Ltd.
Bengaluru based start-up is around ten-year old and provides its software to businesses using a SaaS model. The company plans to raise an additional US$ 30 million in equity financing in a Series B round within the next few quarters, said Mystifly’s co-founder Mr Rajeev Kumar.
It has an office in Singapore and employees around 140 people.
Presently, it offers SaaS solutions to automate airline ticketing distribution, fulfilment, and payments technology for both offline travel agents and online travel aggregators (OTAs).
Airline ticketing and fulfilment is a burdensome process, particularly for OTAs and offline agents who work with budget carriers. Airlines such as Indigo, GoAir operate with OTAs using a wallet model for bookings. Money is deposited by OTAs in form of cash in the airlines' wallet, and process air tickets based on this outstanding balance with each operator.
Due to the lockdown imposed by government, many flight tickets were cancelled by default by airline operators, but these refunds also ended up in the semi-closed wallets owned by travel agents' OTAs.
Mr Kumar said both refunds and payment settlements for successful bookings are credited into the travel agent’s or the OTA’s account typically after every 20 days. But with the Mystifly’s product, the payment cycle is shortened to 24 hours.
“We work with a combination of small and large airlines globally and we also wholesale supply networks who provide us with airfare inventory in bulk. But today as we grow, we are partnering directly with airline operators instead, and enabling a far higher retailing capability for airline brands with our tools, when compared to their existing capability," Mr Kumar said.
The company plans to use these fresh investments to strengthen its product and technology, data science and machine learning capabilities and address airline payments inefficiency.
Mr Kumar said Mystifly reported profits in the last fiscal, and that the start-up initially did not raise any external funds in the first six years of operations. Mystifly’s previous fundraise was reported in 2016 when it had raised US$ 5 million from Recruit Holdings group.
"Ever since out first fundraising in 2016, we have been a profitable business and while we scaled, we didn’t do multiple fundraisers and focused only on profitable growth. At the time of the first funding we were doing just 800 transactions a day, we have now scaled that to around 12,500 transactions a day," he added.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.