Wego, the Dubai and Singapore online travel company, acquired Cleartrip’s Middle East unit and Flyin.com from Indian e-commerce business Flipkart as it seeks to expand across the region and sets its sights on a public listing in the future.
The deal, which also includes a technology co-operation agreement between Wego and Flipkart, is expected to close in the second half of 2022, subject to closing conditions and regulatory approvals, Wego said on Monday.
“This acquisition will significantly increase our scale and capabilities and will strengthen our ability to partner and collaborate across our region,” Ross Veitch, chief executive and co-founder of Wego, said.
“We are also excited to begin a multifaceted partnership with Flipkart that will involve us sharing a brand across regions and co-operating on technology.”
Momentum in the recovery of global air travel has gathered pace as more governments ease coronavirus-related restrictions, according to data from the International Air Travel Association.
An 11-percentage point increase for international tickets was registered in recent weeks, in proportion to 2019 sales, according to the industry body. In the period around February 8, in a seven-day moving average, the number of tickets sold was 49 per cent of the same period in 2019.
“We are doubling down on our conviction that the Middle East is an exciting place to be from an online travel perspective; it's a young, fast-growing region,” Mr Veitch told The National on Monday. The Middle East, North Africa, Pakistan and Turkey together represent a region of 600 million people and a travel market worth $100 billion a year.
“Only 30 per cent of travel bookings are done online in Mena but this will move online rapidly,” he said. “Covid-19 has been a huge catalyst for all sectors to shift online … and the same is true for travel.”
By consolidating Cleartrip and Flying.com into Wego, the companies will benefit from economies of scale including more capital, technology-sharing, more user-data to mine for travel trends and greater commercial bargaining power, he said.
The Wego group, which recorded $2bn worth of travel bookings in 2019, expects to rebound to pre-pandemic levels by the end of 2022, according to Mr Veitch.
“A lot of restrictions are coming off in destination markets, so people are more comfortable booking a trip,” he said. “There's a lot of pent-up demand, every time a route reopens there's a big step-change.”
While travel segments such as leisure and social visits are witnessing a rebound, Mr Veitch also expects business travel in the Middle East to record a faster-than-expected recovery.
“A lot of business in this part of the world is based on relationships, you can maintain some of that on Zoom or Teams, but people want to jump on a plane to see partners, colleagues and employees as soon as possible,” he said.
Wego's growth targets remain focused on Mena, with wider ambitions to expand into emerging markets and to go public, he said.
The executive declined to disclose the value of the acquisition, but said Wego received funding from new and existing investors, with the deal likely to be closed in the third quarter of 2022.
“We see this transaction as effectively doubling our scale overnight, accelerating us to point where we can go public and significantly shortening that time frame,” Mr Veitch said.
It is “too early to speculate” on the timing of a potential listing and the company sees regional stock markets, the US and London as options for its debut.
Asked when the company would be IPO-ready, he said: “We have at least 12 months of hard work to get the teams across Wego, Flyin and Cleartrip working together and driving those synergies. Travel markets also need to recover from Covid. And then we can get back into high gear in terms of growth.”
The acquisition will see the group grow to 400 employees and it is seeking to hire more people, he said.
“We are in a lean fighting shape … It's not about cost-cutting synergies, but tech-sharing and best practise-sharing.”
Cleartrip is an online travel company in India that expanded organically into the Middle East in 2010 and in 2018 acquired Riyadh-based Flyin.com, which played a similar role in developing online travel in Saudi Arabia.
Founded in 2005, Wego has its headquarters in both Dubai and Singapore and is backed by investors such as Tiger Global Management, Crescent Point, Square Peg Capital, Middle East Venture Partners and the MBC Group.
Wego and Cleartrip have their regional headquarters in Dubai internet City.
“The opportunity in travel tech for India is vast, and through Cleartrip, we have been able to provide our customers with a wide range of travel experiences and deeper value,” Ravi Iyer, senior vice president and head of corporate development at Flipkart, said.
“Given our strategic priorities and focus on the Indian market, the acquisition of Cleartrip’s Middle East business by Wego provides continuity to its business, and we believe that they are the right partners to boost its next phase of growth.”
Rothschild and Co. advised Flipkart on the transaction.
Stuart Crighton, co-founder and head of Cleartrip’s International Business, said the company's focus is to build an online travel business with “global ambitions” based in the Middle East.
“The region is well placed to be the engine of growth for travel both as a destination and as a highly mobile, digital-savvy demographic looking for choice and value,” he said.
“By joining forces with Wego, we are able to offer everything from search to service and to contribute meaningfully to that story.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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PROFILE OF CURE.FIT
Started: July 2016
Founders: Mukesh Bansal and Ankit Nagori
Based: Bangalore, India
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- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
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- Under core protection there will be no automatic right to family reunion
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PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
What are the main cyber security threats?
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
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Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
