Ixigo Enters Train Food Delivery With Acquisition of Zoop

24.10.2024 - 16:09 / skift.com / Bulbul Dhawan

Online travel company Ixigo’s board on Thursday approved plans to acquire a 51% stake in train e-catering food service Zoop. The deal is for INR 125.4 million ($1.5 million). 

Zoop is a food delivery aggregator approved by IRCTC, Indian Railways’ official catering, ticketing and tourism platform. It has around 400 partner restaurants and delivers food to 192 stations across India. 

Ixigo has also announced a new feature called ‘Food on Train’ as an ancillary service. The feature would allow users to browse and order meal options, get food delivered to their seats, and track their orders in real-time. 

In its investor presentation, the company said that there is a large, growing and immediately accessible market for this food delivery inside trains.

The company’s CFO Saurabh Devendra Singh said: “The overall size of the food delivery opportunity to rail passengers exceeds $1 billion based on Zoop management estimates. So the overall train food order market has a scope to expand 10-15 times from where it is now, and can help us monetize the train audience better during their trips.”

In the 2024 fiscal year, Zoop had reported a revenue of INR 76.5 million ($910,000), Ixigo said in its investor presentation. 

The acquisition comes a few months after Ixigo’s IPO. Strategic acquisitions and market expansion were a part of the company’s plans, Skift’s Peden Doma Bhutia reported at the time.

“Our playbook of creating the best customer experience by being the most customer-centric travel company will remain,” Rajnish Kumar, Director and Group Co-CEO of Ixigo had said. Back then, the company had not identified any specific acquisition targets, but had allocated funds for the possibility.

Ixigo also reported its earnings for the July-September quarter on Thursday. During the quarter, it launched the price lock feature for flights to allow customers to lock the flight fares for a few days for a small fee. 

It also launched a ‘nearby stations’ feature, which shows train recommendations from stations near the ones that customers are searching. This feature helps in case there are no direct trains available or limited options at stations that customers are searching. 

Giving more context into the acquisition of Zoop is the fact that Ixigo has recorded a nearly 30% ancillary attachment rate during the quarter. This means that about 30% of all bookings on the platform have some form of value-added services.

During the quarter, the company reported an operating revenue of about INR 2.1 billion ($24.6 million).