Now, SaaS joins India’s tech IPO party

While several domestic software-as-a-service companies are planning their IPOs in the US, travel tech-focused RateGain has filed for a public share listing in India. It remains to be seen if SaaS startups can command a similar capital market premium as consumer tech companies



Madhav Chanchani

August 18, 2021

5 Min Read

In the flurry of consumer internet public offerings from India—which has included digital payments (Paytm, MobiKwik), food delivery (Zomato), insurance (Policybazaar), ecommerce (Nykaa), and auto classifieds (CarTrade) companies—software services businesses have been missing in action.

That changed on Monday when Noida-based hospitality-focused SaaS company RateGain filed for its public offering. That includes a Rs 400-crore ($54 million) primary capital-raise in addition to a 22-23% stake being sold by private equity major TA Associates and founder Bhanu Chopra and family.

The development comes at a time when the domestic SaaS  ecosystem is at an inflection point—1,000-plus funded SaaS startups, over 10 Unicorns, $2-3 billion in combined revenue, and nearly 40,000 employees, according to a report by SaaSBoomi and McKinsey.

What does RateGain do? The company comes from an era when SaaS was not a buzzword. Founded in 2004, RateGain provides market intelligence to hotels on pricing and availability of rooms. It also gives pricing recommendations. Customers include InterContinental Hotels Group, Oyo and Lemon Tree.

As travel bookings moved online, RateGain built a distribution software connecting hotels to demand generators, which are primarily online travel agencies such as Makemytrip or travel tech companies like Sabre. The software updates information on prices, room availability and catalogues in real time. More recently, it added marketing technology, which includes managing social media promotions. 

What the Numbers Say: RateGain had a great run in fiscal year 2019-20, with operating revenue increasing 59% to Rs 399 crore ($53.8 million). But revenue fell to Rs 251 crore ($34 million) the following year as the Covid-19 pandemic battered the travel sector.

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