Other than the fund-raise, the biggest positive of Covid-19 has been his move back to his hometown of Kolar. “I don’t see myself moving back to urban life after this,” says Rajeev Kumar.
In its more than 10 years of being around, you could say Mystifly, the Bengalaru-based air retailing and payments platform set up in 2009, has been through its share of life-and-death moments and each time, it has come up swinging.
This time is no exception. Amid the Covid-19 crisis that has decimated travel and startups associated with flights, in particular, Mystifly has managed to raise a Pre-Series B round of US$3.3 million from its existing investors, including Recruit Co. Ltd, which came in as an investor in Series A in 2016.
The distribution, fulfilment and payments technology marketplace platform offers air fare deals from all the Full-Service Airlines through existing distribution platform partnership, Direct Connectivity & NDC and Low-Cost Airlines Shopping across the globe, through a single platform.
Calling the new fund raise “significant with the global aviation industry going through its toughest times”, founder & CEO, Rajeev Kumar, admitted it had been tough fund-raising. “Any investor would be cautious at this stage and they’d want to make sure they are putting in good money, and they’d want to be confident they will be able to recover their investments.”
According to the leadership team comprising Kumar, CFO Pawan Kesarwani and CTO Bharat Goyal, the investment will help Mystifly continue to strengthen its product and technology, data science and machine learning capabilities and addressing airline payments inefficiency.
Mystifly launched the industry’s first fully automated and guaranteed cancellations and changes product C2 in November 2019 and its new age airline retailing platform ASR1.0 in Feb 2020.
“The era of airline retailing and efficient payments has begun and the current crisis has made this transition faster than what was anticipated earlier. Airlines will significantly improve their bottom-line by saving on payment costs and becoming new age retailers as they can make more relevant offers, including services with higher margins than just the flight seat price.
“There is no doubt that Retail Airlines will be the new talk of the town in the coming months, just as how Low Cost Carriers were about 10-15 years back.”
Kumar said the investors’ confidence was further boosted by the team’s proven ability to turn things around. “A year ago, we managed to turn around from burning money to grow in China to becoming profitable, and they’ve seen what we can do.”
He was speaking about the company’s decision to axe its China business unit at the beginning of 2019 when it realised the drain on its resources, and it managed to turn around the business by June. “I think what we did then showed our commitment to our business.”
There’s no denying the past four months have been tough. “Like with any other travel business, there’s been little revenues,” he said. “It was all about survival.”
It had to lay off 30% of its workforce, with the rest moving to remote work. “Honestly, when we spoke at the beginning of March, we thought it’d be bad but we didn’t realise it’d be of this magnitude. So towards the middle of March, we took very difficult decisions. We cut areas where we felt would be of no value add at this time – business development, operations – but we decided we wouldn’t compromise on product, so there was no cost-cutting there from a staff standpoint.”
It’s spent the past three months fixing tech issues that it never had time for, when business was growing. It also had to spend considerable time dealing with refunds and reissuances. “It’s been fighting for survival in every possible manner – to make sure we don’t get dragged down in the quicksand.”
And while it is taking comfort in the fact that there is some recovery being seen with some travel bubbles being formed, Kumar said its priority is to create differentiators in its business for when the recovery comes around. “We are going for new market opportunities – for example, we went live with American Express leisure travel, with the cards business and points redemption.”
Asked if it would have been handy to have a foot in the China market at this point, given it is the only market showing strong recovery, Kumar said, “We will continue to engage in the market but there is no point doing business in any market if you are losing money.”
Kumar said while 2020 can be written off from a revenue perspective, it is a year that cannot be written off from how it’s challenged the industry to look at itself in the mirror. “It’s a year where structures that have been created can be addressed, where norms were challenged. It’s been a leveller.”
For him personally, it’s been an eye-opener in terms of work and lifestyle. While Bangalore is going into lockdown from tomorrow (July 14), Kumar moved out of the city, back to his hometown of Kolar, almost four months ago. The district, about 100km from Bangalore, was known for the Kolar Gold Fields which closed in February 2001.
Kumar went to school about 100 metres away from what used to be the second deepest mine in the world.
“I’ve now been working and living in the countryside for the past four months and as long as there is connectivity, we can work from anywhere. Kolar is the best place to be in, there is so much open space here. Even with the extraordinary stresses we’ve had to deal with in the business, all I have to do is go outside and see vast open spaces, and that gives me perspective.
“That’s been the biggest positive of this crisis and I don’t see myself moving back to urban life after this.”
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