Returning to Sri Lanka in 2012 after having studied and worked in London for most of their adult life, university mates Thushan Shanmugarajah and Abishek Sithampalam looked around for something to do.
Their time working in London had planted in the 20-somethings the idea of doing a tech startup. Looking towards India, they saw that online travel was taking off and companies such as MakeMyTrip and Yatra were flourishing.
There was no such business in Sri Lanka and the duo decided to take the plunge. “Sri Lanka had just come out of the civil war, we saw that no one was doing anything online in travel and we thought, travel must be easy, there’s no need to deliver anything,” said Thushan.
They decided a fare comparison site would work and bought the findmyfare.com domain for US$6. That was the easiest part.
“Little did we know how difficult travel was,” recalled Thushan, who studied mechanical engineering and economics. They sank US$50,000 each (money they had saved while working in London with the intention of starting their own business) into building just the infrastructure for the business, including getting the necessary licences and setting up the payment gateway.
Then there was the resistance to two young kids trying to disrupt the status quo in a very traditional market. Sri Lanka’s travel industry is dominated by decades-old family-owned groups or trading houses.
“Nobody believed in online in Sri Lanka then and it was difficult to get airlines to work with us. People saw us as disruptors and they didn’t like us,” he said.
In an interview they gave a local newspaper, the two co-founders said, “We heard comments like ‘how dare you’, ‘you’re too young’ and ‘It took me twenty years to get here, what do you think you’re doing’ every day. It was a difficult time, but we were fearless and did not take no for answer.”
From fare comparison, which they found hard to monetise, they moved to a transaction model in 2014. That year, they raised US$1.3 million in funding from a couple of family-led funds – from “traditional companies that wanted to get into online” – and that money was used to grow the team and improve the tech platform.
A breakthrough came in 2014 when Visa and Mastercard, wanting to grow credit card payments in Sri Lanka, decided to work with findmyfare, giving it the legitimacy it needed with airlines.
Today, the company has grown from US$300,000 in transactions to US$17m last year and it is projecting US$25m by March 2020.
It raised a Series B round of US$2m last August from Ironwood Capital Partners, one of two private equity funds based in Sri Lanka. “There are only two private equity funds in Sri Lanka which is why it’s hard for tech startups to really grow,” said Thushan. “With Series B, we were able to get strategic advice, bring in an industry expert and this will help us expand.”
The company, which has a team of 68, wants to expand beyond Sri Lanka into markets with similar characteristics.
“Sri Lanka is a small market (21 million population) – worth approximately $500 million with three key segments, labour, pilgrimage and retail, which is about $250m. Brick and mortar agents are still big – the top 10 agents command 70% of the market. It’s very fragmented.
“Technology helped us scale and build a strong brand. We understood data and we came up with solutions for users – we would track their usage and introduced features like, hold my seat, reserve a ticket (with a time limit). We introduced processes which allowed us to scale.”
What’s interesting with the Findmyfare app (which has 25,000 downloads) is that it allows users to also pay utility bills, a feature it recently introduced. Thushan said about 1,500 customers used the app to pay these bills. Customers can also buy movie tickets.
Like with every OTA, Findmyfare is trying to solve the problem of infrequent usage and is also working on a loyalty programme. “We definitely want to focus on our app development, 70% of our users are browsing on mobile, and people don’t want to have so many apps on their phone.”
The company’s growth was also helped by the fact that during the years of peace after 2012, more airlines started flying into Sri Lanka – it went from 12 in 2012 to 38 carriers although the number is now down to 26 after this year’s Easter attack in Sri Lanka.
“Things are returning to normal but it’s still challenging for our country,” said Thushan.
• All images credit: Findmyfare