Despite majority of its revenue coming from the US, this is what compelled RateGain to be the first SaaS company to head for an IPO in India

• RateGain intends to raise over ₹400 crore through its fresh issue, which will be used for investments and acquisitions.
• Rate Gain has over 1,434 customers, spread across 110 countries.
• The company counts Lemon Tree, OYO and several other hotels and OTAs as its clients.
• It will continue to focus on the US market after its public listing as well.

Software-as-a-service startup (SaaS) RateGain Travel Technologies — which has less than 1% business coming from India — had decided, earlier this year, that it will get listed in its home country.

This is rather odd as several tech entrepreneurs dream of getting their startups listed in American stock exchange Nasdaq. It’s not just a matter of pride, but also a strategic move.

There are majorly two reasons for Indian tech startups to explore a Nasdaq listing — retail investors have better understanding of tech business in the US and/or majority of their revenue is coming from that market. Besides this, international listing gives Indian companies a larger and more diverse pool of capital.

Whether it's the already listed Freshworks or soon-to-be-listed Icertis, InMobi or PineLabs — one of these three factors are the driving force of listing abroad.

So it is quite amusing why RateGain would choose to get itself listed in India and that too in 2021 — potentially the worst time for any travel tech business due to the ongoing pandemic.

Bhanu Chopra, the chairperson and managing director of RateGain told Business Insider that there were three reasons why the company decided not to go for a Nasdaq listing.

First, the ability to drive up brand value being a local company is much higher. Second, they wanted to be the torchbearer of the first product SaaS company to list in India.

Third, there were several logistical issues that couldn’t have been solved without making some organisational changes and it was quite cumbersome.

Therefore, the company decided to stick to its home market and be the first SaaS company to list in India.

Rate Gain has over 1,434 customers — across the hotel, hospitality and online travel agency (OTA) segment — spread across 110 countries. In order to serve the customers in these locations, RateGain has set up its subsidiaries in the United Kingdom, United States and Spain.

It has also acquired three companies to date — US-based DHISCO and BCV, and Germany-based myhotelshop.

About 65% of RateGain’s revenue comes from the US market, while nearly 2% comes from India. The company will continue to focus on the US market even after the public listing as the majority of its customer base is settled or registered there.


The company — founded in 2004 and bootstrapped till 2017— intends to raise ₹400 crore through its fresh issue. Besides, the company will also sell 2.26 crore as offer for sale (OfS). This capital will be used to make strategic investments, acquisition and fund inorganic growth initiatives. Its last reported valuation was $133 million in 2015.

But why now?

It’s no secret that the travel and hospitality segment was severely hit since March 2020, when the world stepped into pandemic-induced lockdowns. As the entire segment was suffering, RateGain was bound to suffer too as they comprised its clients.

The company decided to take a pause and arm itself with better products to meet the pent-up demand that may come back soon as people indulge in revenge travel and COVID-related restrictions are lifted. The company counts Lemon Tree, OYO and several other hotels and online travel aggregators (OTAs) as its clients.

Besides this, the company believes that Indian investors are now ready to invest in tech businesses.

Chopra believes that the investors' interest in Indian startups have increased in both private as well as public markets. This can be seen in terms of the number of unicorns -- private firms valued at or more than $1 billion -- that are being created as well as the number of companies hitting the public market.

“My sense is that the Indian investor is now ready and they understand the future of any industry is digitisation. Now, RateGain is leading that effort in digitisation of the travel and hospitality industry” Chopra added.

The pent-up demand of the travel industry and the positive global outlook is driving 26% compound annual growth rate (CAGR) growth. “Retail investors understand that the travel industry is recovering very fast and it is going to be the fastest growing industry in the next four-five years,” he added.

Chopra believes that the ecosystem has developed enough for retail investors to understand the upcoming trends.

In a previous interaction with Business Insider, Droom’s founder and CEO Sandeep Aggarwal highlighted that Indian investors now have a stock appetite to invest in tech businesses. Earlier, he was of that view that Indian new age businesses are not rewarded in the Indian stock exchange.

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