Prosus to invest ₹1,296 crore in ixigo for 10.1% stake through preferential issue

AI-led travel platform ixigo has announced that global technology investor Prosus will invest ₹1,295.56 crore (about $146 million) in the company for a 10.1% stake on a fully diluted basis through a preferential issue of equity shares priced at ₹280 per share - a slight premium to its 10-day volume weighted average price. 

The company said the funds will be deployed equally across four areas: organic growth and AI-led product development, inorganic acquisitions, working capital needs, and general corporate purposes - each accounting for up to 25% of the total proceeds or ₹323.89 crore.

The deal values ixigo at about $1.45 billion (₹12,900 crore approximately) on a post-money basis. The investment, subject to shareholder approval, marks one of the largest single investments in an Indian online travel agency this year. 

ixigo said this is “the time to double down on our conviction.” In a statement filed with the exchanges, the company noted, “Over the last 18 years, we have patiently built travel technology building blocks across utility and transactional use-cases for the next billion users. Even though we had raised very little capital throughout our journey, we ended up innovating and solving deeper problems for Bharat, giving us the largest organic base of travel and transportation users in India.”

Fueling the next phase of AI-native growth

ixigo plans to use 25% of the funds for organic growth, primarily through investments in artificial intelligence, product enhancement, and technology infrastructure. This includes developing new AI-led platforms, strengthening its hotels OTA business, and scaling its cloud and software capabilities. “We will be investing in research and development to create and enhance AI-first, agentic platforms, products and services. This AI-native growth strategy will help drive our next phase of efficiency, revenue generation, and market disruption,” the company said.

Another 25% will be reserved for inorganic growth opportunities, including mergers, acquisitions, and strategic investments. ixigo said it will look at targets that deepen its product and tech stack, open new markets, or add new technologies and talent pools. “We evaluate such targets based on leadership quality, synergy with existing businesses, and access to technology or scalable infrastructure,” the company said. If suitable opportunities don’t materialise within the set timeframe, the unutilised funds will be redirected to organic growth.

Expanding hotels vertical and strengthening operations

ixigo is also betting big on its hotel OTA segment, which it described as a large and underpenetrated market. “We will ensure we continue enhancing our product to achieve stronger product-market fit, deepen our supply inventory, and invent relevant ‘peace of mind’ products that strengthen customer trust,” it said.

Another ₹323.89 crore will go towards working capital as the company scales its OTA business across flights, trains, buses, and hotels. The remaining 25% of the funds will be used for general corporate purposes, including administrative costs, employee expenses, and capital expenditure.

On the expected impact, ixigo said, “Near-term, these investments may dilute ROE optics. Long-term, we believe this capital turns today’s momentum into tomorrow’s category leadership. The real test is whether today’s investment compounds into tomorrow’s cash flows - we believe it does.”

Prosus’ investment aligns closely with ixigo’s AI-led growth strategy. With over $8.6 billion invested in India to date, Prosus has backed Flipkart, Swiggy, Meesho, Urban Company, and Rapido. Its global portfolio includes Tencent, OLX, iFood, and Despegar.

“We believe a stronger balance sheet, combined with a disciplined underlying business, will help us maximise long-term shareholder value creation,” the company said.