chennai last week nexus venture and matrix backed stayzilla suspended its operations this is not the first startup in this space to freeze operations the consumer travel tech ecosytem has witnessed rapid changes in the last few years and while several have shut shop or been taken over some continue to thrive as disturbing as the news of stayzillas shutdown is it would be hasty to use it as an excuse to find faults with the travel tech space in india after all we must not ignore the recent news of the handsome returns made by saif partners on makemytrip or the solid performance of indiafirst business approaches in travel such as redbus or railyatri said shubankar bhattacharya partner with kae capital since 2010 consumer travel tech has seen a total investment of 82514 million in 140 deals it has also seen 67 shutdowns and 10 acquisitions after 111 44 million were pumped in 2011 there was a lull until 2015 a flurry of activity in 2016 where 6234 million logged in almost 75 of the total investment in the sector was made data from traxn said including the makemytripibibo merger and yatra onlines nasdaq debuton the consolidation side since 2010 travelgurus acquisition by yatra mygola which had earlier raised funding from helion blumberg 500startups and other angels being taken over by makemytrip and the continued talks between tiger globalbacked zo rooms and oyo are some of the prominent instances other players like polama and weareholidays backed by blume ventures and matrix partners have either shut shop or are totteringchallenges includes travel being not an easy repeat engagement product for startups that are either marketplaces or have a niche productmonetisation could be a concern said karthik reddy of blume ventures the seed stage investor has placed multiple bets in this space including audiocompass railyatri and tripvillasfor content discovery startups like tripoto and triphobo the challenge lies in differentiating its own content from the myriad of information already available players like stayzilla ended up investing standardising supply and did not see enough demand to justify the economics the travel marketplace does not have local network effects and we cant really take a focused citybycity approach in terms of matching supply and demand the demand and supply for homestays was nonexistent 18 months back excluding a few small pockets as a result we had to invest extensively in both sides of the marketplace creating homestays as well as guests who would choose a homestay across the country we were actually successful at this we have created 8000 homestays in over 900 towns but this stretched us thin yogendra vasupal cofounder stayzilla bloggedhari ganapathy cofounder pickyourtrail offers customised itineraries for international travel only visa restriction along with constraints of time and money are keeping travellers at bay information overload and restricted budgets mean that travellers visit only the popular spots with little left for exploration it will take another 56 years before indians travel without inhibition he said with the makemytripibibo