Meet the computer science grad who left Microsoft to set up one of India’s largest travel tech companies

After studying computer science and engineering at the Indian Institute of Technology in Delhi in 2001, Gaurav Bhatnagar, co-founder of TBO Tek Limited, earned himself a job that most young graduates could only dream of – he became a software engineer at Microsoft’s headquarters in Redmond, Washington.

“It was the biggest tech company in the world,” Bhatnagar told Travel Weekly.  “Back then there was no Facebook. Amazon was very small. Google was very small. Apple was small. [Microsoft] was the company to work for.”

Whilst it was a dream for many, Bhatnagar was adamant even back then about what his true calling in life was.

“My dream was always to start a company,” he says, although he adds that working at Microsoft was as good as it could have been for a young college graduate.

Bhatnagar first caught the “startup bug” whilst studying during the dot.com boom.

“Between 1999 and 2000 I saw these startups happening. People were getting funded, and then everything went away in 2000. But that’s really when I got the startup bug. I was like, ‘This is what I want to do’,” he says.

He just needed an idea. Step forward travel.

“There was this big investment thesis back then [about travel]. Internet penetration was very low worldwide. In India, only about 4-5 per cent of people had access to internet, right? The view was that when it crossed a certain threshold – something like 8-10 per cent – online travel would take off because it doesn’t require logistics. It doesn’t require an actual inventory of goods and stocking of stuff. All of that was hard in India back then – the infrastructure was not there.”

“Travel felt like this easy thing to move online – so that’s why I wanted to be in travel. I was scouting to do a travel startup. That’s actually how I met my co-founder [Ankush Nijhawan]. His family was in travel and I was in tech. He came from a very traditional family who had been in travel for several generations. And that’s how we met and decided to do this.”

Whilst Silicon Valley and the US might have been start-up-mad in the early millennium, Bhatnagar says this was not the case in India.

“The thing to do was go to the US and get a master’s degree and then figure out a way to a green card and citizenship,” he says.

Catching a glimpse of how things were in the US made Bhatnagar realise the scale of the opportunity back home.

“Those of us who had exposure to the US scene could just see that this is going to happen in India,” he says. “They were talking about it back then. China was starting to take off and everybody had a view that India was going to take off a few years after China. Because we had seen what was going on in the US, we knew it was inevitable.”

Whilst the opportunity might have been there, so were the struggles. Bhatnagar and Nijhawan set up TBO.COM in 2006 but it would be a long slog before investors got on board.

“Access to capital was very hard. It took us five years to raise money,” he says. “We started in 2007 and we finally raised money in 2012. So that was hard.”

The silver lining of not having access to capital until the company was more developed, was that there was a culture of profitability early on, Bhatnagar says.

“For a couple of years, I was running a software services business as well. That would pay the bills. Since this business did take off, we’ve always been profitable, probably because we never raised money early. The culture of the company was to maintain profitability,” he says.

“A lot of startups start the other way around and they burn a lot of money for many years. You keep getting that money and you keep burning that money. But because we could not raise money early, we spent the first few years building the business in a way that could pay for itself.”

Like many startup founders, one of the biggest hurdles Bhatnagar had to overcome was how to attract premium staff. Small businesses require the best, but the best staff often demand the highest salaries.

“One thing we’ve done consistently, I think from day one, is create a very empowered culture and people like that,” he says.

“People were allowed to make decisions. We entrusted people with big responsibilities very early on in their careers. That is something we could offer, right?”

Why agents?

With Bhatnagar’s interest in the rise of the internet consumer, you’d be forgiven for wondering why he opted to set up a business built for agents rather than consumers.

Initially, TBO was set up to fix a simple problem, he explains. In 2007, the Indian aviation industry was just starting to be disrupted by a number of low-cost carriers such as IndiGo and SpiceJet and this presented a problem. At that time, airlines required agents to set up individual accounts with each of them separately. This meant it was very costly and time-consuming for agents to book with multiple airlines.

“We created a system where we aggregated all the full-service carriers, all the low pass carriers, in one place,” Bhatnagar says.

It was a simple solution, but it solved a problem, and TBO began to gain the business of agents in India.

The big break

Whilst the initial iteration of TBO was a success, Bhatnagar quickly realised there was a lack of longevity in a business dependent on airline commissions.

Even then, the “writing was on the wall” that airlines were likely to lower the commission to zero, he says. It was for this reason, that TBO decided it was time to branch out – both regionally and in terms of offering. They began to pitch to the Middle East and to hotels and tours as well as just airlines. It was here that TBO its big break.

“We pitched to Amadeus to run their hotels program across the Middle East, I think they were present in 22 countries in the Middle East, and they gave that contract to us. It was a big deal, because we had never sold hotels before and we were a startup. Amadeus was this huge company. So that was a very lucky break, and we really capitalised on it.”

With TBO firmly on the map, they went from strength to strength starting out in growing markets but eventually expanding to the US, Europe, and Australia this year.

Going Public

The first suggestion to go public came from TBO’s investor Standard Chartered Private Equity back in 2021, at a time when tech stocks were soaring. Whilst a prospectus was completed at the end of 2021, a weak market in 2022 meant the plans were put on hold. In the interim, Bhatnagar strengthened the company by buying Jumbo Tours Group (a Spanish company) and bringing in a new investor – General Atlantic.

TBO finally went public on the National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE) in May this year.

The company raised approximately US$186 million (AU$280m) from an Initial Public Offer. The Qualified Institutional Buyers (QIB) portion was subscribed 125.51 times, while the Non-Institutional Investors (NII) portion received a subscription of 50.60 times.

Were investors jaded by Covid? Bhatnagar says that the world’s demographic meant that many were excited by the opportunity presented by the travel industry.

“We created an investor pitch where we explained that the reality is that the world is going to get older, more prosperous, and people will have a lot more time at their hands with work automation such as AI,” he says.

The thesis was that an older, richer generation would spend more on travel, Bhatnagar.

When asked about the risk of global warming and a focus on sustainability, Bhatnagar dismisses any suggestion that this could lead to a shrinking of the market.

“It’s a worry because it contributes to global warming, but I don’t think there is any conversation right now around stopping air travel. People are switching from air travel to trains in Europe, for example, and that’s great, but I don’t think anybody is suggesting that we all stop travelling,” he explains.

One of the perils of going public is that you open yourself up to a lot of noise, however Bhatnagar is grounded in not letting too much market chatter influence him.

“If the share price moves whilst we are asleep then we know that has nothing to do with us,” he says, simply.

After starting the company back in 2006, does Bhatnagar have any plans to leave now it is public?

“The whole premise of every investor in the company [is we’ll be running it]. So, yeah, I’m not going anywhere. And I own a lot of equity in my company,” he says.

B2A travel tech platform TBO goes public with an eye on APAC

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