travel.ru
Oktogo.ru

Russian Online Hotel Booking Site Oktogo.ru Gobbles Up Travel.ru For “Up To $2 Million”

Next Story

AdYapper Raises $1.2 Million To Analyze Ad Viewability For Digital Campaigns

Some further consolidation in the Russian online travel sector. Following last month’s news that Russian travel startup OneTwoTrip had acquired the analytics-driven hotel price comparison site DealAngel, today Russia’s Oktogo.ru is announcing that it’s gobbled up local online travel portal Travel.ru.

The acquisition price is said to be “up to $2 million including stock incentives”, presumably including earn-out targets, while Oktogo says that the combined forces gives it an audience of 3 million unique monthly visitors, making it “by far the largest online travel destination serving independent travelers in Russia”.

To that end, 1998-founded Travel.ru caters more for the discovery end of the online travel user-journey, calling itself a good old-fashioned “portal” and focusing on expert travel content, both editorial and user-generated, for Russian travellers.

Meanwhile, Oktogo, which is backed by VTB Capital, Mangrove Capital Partners, Ventech and ABRT, is described as an online travel agency/aggregator. It offers offers over 5,000 hotels in Russia and over 250,000 hotels worldwide, claiming to have the biggest database of local hotels online.

In a statement, Marina Kolesnik, co-founder and CEO of Oktogo.ru, talks up the synergies between the now combined companies: “We will further enhance the Oktogo.ru hotel product with unique content from Travel.ru and leverage our hotel product to better serve the loyal audience of Travel.ru. As a result, we will be able to deliver a unique service to customers at different stages of decision making cycle – from those who gather information and search to those who shop and buy travel product.”

That has echoes of the reasoning behind OneTwoTrip’s purchase of DealAngel — it’s about capturing as much of the value in the customer journey with regards to all things travel. And with the Russian online travel market said to exceed $10 billion in 2013, according to market research firm PhoCusWright, it’s easy to see why that’s an attractive proposition, and will almost certainly lead to further consolidation.

It will also likely see further casualties along the way — in June this year, we reported that Oktogo competitor Ostrovok, backed by Yuri Milner (as part of a $25 million raise), had slashed a third of its staff, having missed its target to break even. As we noted at the time, the margins in travel booking are well known to be thin, requiring a lot of scale to work. In that sense, this market has more than an air of ‘winner takes all’.