The biggest promise that the Internet brought was access to content anywhere and anytime. “Why should airfare booking be any different?” This thought gave birth to Mystifly back in 2009. Ten years on, the business, which started as an India-based B2B airfare marketplace to provide a corporate travel solution to TMCs and SMEs domestically, is a very different animal.
For starters, it’s no longer an India business, and now calls itself “the world’s leading airline consolidator”. In 2016, it took in US$5 million funding from a Japanese powerhouse, Recruit, and this year, CEO & founder Rajeev Kumar brought in a Chinese co-CEO Mary Li, in a strategic move to further grow its Global and Chinese business. This fosters a unique blend in leadership culture that embraces Indian, Japanese and Chinese influences.
Li was the founder & COO of the first data-driven travel technology company in China, ASLAN, whose data products were used by most travel agencies. In 2013, she sold ASLAN to Alitrip and she became head of air tickets for the Alitrip. After she quit Alitrip, she went on a two-year world expedition before joining Mystifly.
“The biggest challengers to our business were Chinese travel agents like Alitrip, Ctrip – they were executing faster than us. I’ve known Mary for eight years and she knows scale better than anyone else. In India, when we say 10,000 international transactions a day in India, we think it’s a big deal because there are not that many that can generate that number using their own tech but in China, that’s a small feat.
A blended model of leadership, bringing together Indian, Chinese and Japanese influences: Rajeev Kumar and Mary Li heading the new, expanded team in Bangalore.
“I wanted to bring in Mary and other members from Alitrip. There’s a great amount of efficiency that the Chinese bring, they are meticulous and have the know-how of the industry. And think about it, we’re the first Indian travel business to invest in people from China, usually it’s the other way round.”
Making her co-CEO and giving her “skin in the game” was Kumar’s way of saying “we are making a big change within Mystifly. We don’t want to create two power centres but we want to work in sync”.
“I was very fortunate that she was eager to do something new.”
Rajeev Kumar and Mary Li: “We don’t want to create two power centres, we want to work in sync.”
“Of course,” laughed Kumar, “there was the inevitable cultural collision. But I knew, it was my decision, I knew it would be painful and it would take us time. We both accommodated and absorbed the shock.”
Then of course there’s also the Japanese involvement from Recruit. “From an investor standpoint, Recruit has been incredibly supportive,” said Kumar. “They make you think. They make us push boundaries and that makes us stronger as a company.”
Mystifly’s ambition is to be the leading global B2B airfare marketplace that adds value to airlines and the OTA ecosystem. “Our next step is to add more value to suppliers and become a channel for distribution for airfares in APAC to start with, followed by Europe,” said Kumar.
Mystifly is working to increase direct integration with airlines from the current 15%. “The more indirect, the more inefficiency. We want to help an airline cut distribution costs and get customers to pay for the value they are getting.”
Competition is on the rise with many players “overly burning money”, said Kumar. “There’s a lot of gambling going on from competitors who are following our model– where they think they can’t make money on the first ticket, but make hay on the 10th ticket when there is a refund or change”.
He knows there is no short-term success in building a B2B global airfare marketplace. “It takes a lot of patience, time and focus and you really have to work on the details with the airlines.”
He should know. It’s taken Kumar almost a decade to bring Mystifly to its current stage. From a purely Indian business, its international business has grown from six per cent in 2012 (the year it made its first foray outside India at a WiT Conference) to the current 90%.
Even though the business was bootstrapped in the early days, it still grew ten times from inception up to 2016 and four times from September 2016 onwards, after the investment from Recruit until the end of last financial year.
“In 2016, we were doing 1,600 transactions a day, in November this year, we will do 15,000 a day,” said Kumar.
Growth has come from international OTAs who see Mystify as a partner to convert their traffic into meaningful transactions. “Every company has limited resources no matter how big they are. For an OTA, ‘flights’ is considered a low margin business and there’s minimal investment on the part of OTAs who are spending more on accommodation because that’s where the real margins exist. But with new business models emerging and airlines expanding their markets, every OTA needs access to them.”
The funding from Recruit came in handy to invest in Mystifly’s tech. “When we started, we were TMC-centric and our platform was not built to scale. Today, we want to focus on ensuring our tech is very strong. Technology with unmatched content brings in transactions and when transactions happen, a marketplace is created.”
Having said that, Kumar said the business is focused on “transaction profit” and not burning money.
Mystifly is now looking to raise Series B funding. “We are building an alternative distribution model with machine learning and shopping optimization. A platform that brings everything together in a way that meets customer expectations is still a long way – one that combines the power of shopping & distribution, fulfillment and global payments settlement.
“What we want to do is create a solution that combine the attributes of low cost carriers and full service carriers and that addresses the shopping requirements of customers at high speed and efficiency – in less than three seconds.”
He is aware it’s a hard problem to solve – a lot of the attributes needed to create an end-to-end shopping solution still sit in silos – but “that’s what the airline business is about, the devil is in the details. We are prepared to do the heavy lifting and work on the granular to enable a better shopping experience for travellers”.