Deep Kalra The Trip Maker
Date: Tuesday , November 01, 2011
Deep Kalra made quite a few eye brows raised when he announced his decision to make his company Makemytrip.com public in U.S. in 2009 for a company which had not made any profit for three consecutive years, it was a bold and risky decision. But for people who knew Kalra, the founder and CEO of the company, there was nothing surprising. This unassuming and simple guy was known for his unconventional decisions. He surprised Analysts and Investors but their apprehensions and doubts soon turned into optimism and support when he laid his cards clearly and forcefully in front of them. Thus, Makemytrip became the 4th Indian company to become public in U.S. raising an amount of $70 million and Kalra became the Pied piper inspiring and showing the way for many Indian companies who are hesitant to take the IPO way in U.S.
The making of an Entrepreneur
Entrepreneurs always tread on an unconventional path. But Kalra gave another twist to his destiny when he decided to set aside his experience to do something new in the space in which he had zero experience in. For people who know him as a banker, it would have made more sense if he had started a company in the BFSI sector. But people who know him for the person that he is, the choice to start an online travel portal would never be a surprise, since they know how font of travelling the guy is. In Kalra’s own account, he wanted to start something that is closer to his heart. His idea was to start an ecommerce company in the leisure travel section in India. He started his baby steps with ‘India Ahoy’ a high leisure traveler’s site. Back then, there was no company in the Indian market that he could have modeled his company after. He had to start the company from scratch and pioneer the whole business model to perfection, and this did not happen overnight.
An IIM grad, who took the conventional route initially, he joined the corporate sector straight from college. In the early 90s he had a successful stint at ABN Amro Bank at the senior levels, including vice-president, it wasnt an easy task to say no to the golden handcuffs that the job in ABN Amro. It is here that he learned the tricks of the trade.
Athletes and entrepreneurs are similar in many ways, in the sense that they both follow their dreams. A successful entrepreneur is never afraid to pursue his dreams and he will never stop before he achieves it.
No wonder, Kalra felt dissatisfied with the safe, secure and well paid job in the banking sector. He joined AMF Bowling, an American company that wanted to setup bowling alleys and billiard halls in India. It was not his company, yet it initially gave him the satisfaction of doing something new and different than his mundane job. He even set up about 200 small bowling alleys in the country. It acted as a crash course in entrepreneurship for him. Still he never got the necessary mentorship from the management of AMF Bowling.
This might have been the prompting factor behind his decision to move back to the banking sector, this time to GE Capitals. It is said that, keep a shark away from blood, once it gets the taste of blood it will be impossible to keep it from wanting more. Kalra had already tasted entrepreneurship and it was only a matter of time before the entrepreneurial bug in him woke up again.
The Trigger In the late 90s, while in GE Capitals, he got the chance to be involved with the burgeoning Indian internet industry and saw the huge opportunity the industry is offering. It was the dotcom era, the time when internet companies were the hottest commodities in the U.S. Even India had started feeling the ripples of the industry and the market was opening up. He also got to meet some of the brightest and greatest minds of this new age industry. These meetings and interactions later triggered his entrepreneurial hormones.
During this period that he met Sanjeev Bikhchandani, the founder of Naukri.com, and Ajit Balakrishnan, the founder of Rediff.com, two of the new generation successful internet entrepreneurs from India. Kalra got to know them in person and was motivated by the duo. For him they were not just inspiration, they were much more than that; they are what he wanted to be. This meeting proved to be the push he needed to go back to the arena again.
The Challenge & the Aftermath
Finally the time came when he could no longer keep himself from going after his dream. And so, in the 2000s he ventured into the space of entrepreneurship again, this time with his own company that he started with his lifetime savings.
He hired his first few people, set up the office, and raised an initial funding of $2 million from Neeraj Bhargava, Managing Partner of eVentures to take Indian Ahoy forward. Being new and inexperienced in the entrepreneurial space, he gave up 70 percent of his company to eVentures for the $2 million they put in the company, a naïve move. With the dotcom bust eVentures left India and made a distress sale and Kalra, who had by this time realized that the move was a bad one, bought his company back. He was all ready to make it big when the harsh reality hit him like a hammer on the face. Indians are not particularly forthcoming to new technologies and options in the market. This reluctance is deep rooted and it is closely associated to trust. India Ahoy came to the market at such a time and Indians gave it a cold shoulder. Indians were not buying online, and Kalra learned this the hard way.
So, as any baby would, he fell, and he fell hard. Financial issues started breathing down his neck like a snake waiting for the right time to strike and the company shrunk to half of its original size. The passion in him made him stick to his heels. He believed in his company, he knew it was worth fighting for and decided that if he is going down then he is going down fighting, and more over he had a team of people who believed in him and the company. Together, they started searching for a shred of hope somewhere and they found that hope in the U.S. Indian community. Immediately the company’s business model was rewritten and started targeting the technologically mature Non-Resident Indians (NRI); lo and behold MakeMyTrip was born. It was not an all fun ride though; Dotcom Bust, 9/11 and SARS shook the industry to the core and made him wonder whether he is in the wrong business. But their resilience kept them going. He and two of his colleagues went forward without drawing salary for 18 months, and this dedication, belief, and hard work from their part paid well, as the company grew at an exceptional pace and broke even in 2003.
Years passed, still his primary ambition, to be a major player in the Indian markets, lingered inside him. In 2005 when Kalra came to India, he noticed that the scenario has changed a lot. Low cost airlines has made air travel an affordable dream for the Indian middleclass and the Indian Railways has started its website, selling ticket online and people are actually buying them. He observed this with the fascination of a child who is watching something new and amazing. But, before he takes the big decision to come back, he needed to be sure. So he decided to field test Indian Railways website and its effectiveness. Kalra booked 50 tickets from the website with different addresses and was amazed when all the 50 tickets got delivered without fail. Then he knew the Railway’s system was perfect and this might have installed the trust in the skeptic Indian minds. Based on this he took the decision to bring his company home. Thus MakeMyTrip came back home and got a grant reception from the domestic mass. Since then the company has established itself in the country and has diversify its product offering, adding a variety of online and offline products and services. The company currently enjoys about 50 percent of the market share.
The Offering Coming back to India went well, but that was not the grand finale for Kalra. He knew the potential of his company and was willing to push it further. His motto was simple, offer the maximum value for their customers. The company stuck to this ever since it came on the right track. Then came the time to take it to the next stage; IPO. He took it public last year and the offering is was nothing short of phenomenal. When it was listed in Nasdaq on August 12, 2010, it was sold for $26.45 per share against the listing price of $14 per share, thus doubling its valuation to $900 million.
Then the company went through, what can be called a dull phase. Their share price came down but Kalra and his team were least worried. They knew for a fact that this was just a temporary loss of momentum and they will be on track soon enough. And, from the looks of it one can say adamantly that they are coming back. Under the great leadership of Kalra the company is having a great year now. With revenue of $52 million, it recorded a year over year growth of 54.3 percent in the quarter ending June 30, 2011.
The Realm Beyond Kalra seems to drive the company through an inorganic growth mode. He believes that if a company has to be successful in a new market it needs to have a deep root in this new territory. His company is gaining this deep root in its new territories by acquiring other companies, which are already established in these markets. In May 9, 2011, the company acquired approximately 79 percent equity stake in Luxury Tours and Travels (LLT), a Singaporean travel agency that provides hotel reservations, excursion tours and other related services to inbound and outbound travelers in Singapore, thus increasing its foot hold in Singapore.
Kalra continues his focus on both of the markets alike and also nurtured the growth of its offline businesses like its franchises and affiliates, thus furthering its prominence in these markets. He and his team had much higher plans for their company; With his belief, that Ideas can be borrowed but passion cannot be borrowed he is all set to make Makemytrip, more than just an online travel portal, a one-stop-shop for all the travel needs.