IPO Note - Rategain - PL - 021221

Rategain Travel Technologies Ltd.
Rating: Subscribe | Pirce Band: Rs 405-425
December 2, 2021 Leading global SaaS player in hospitality and

travel sector
IPO Note
RateGain Travel Technologies Limited (RateGain) is among leading
IPO Fact Sheet distribution technology companies globally in travel and hospitality (T&H)
Opening Date: December 7, 2021 industry. In highly fragmented market, the company is well positioned to
Closing Date: December 9, 2021 capture wallet share given 1) its comprehensive, inter-operable, innovative
Kotak Mahindra Capital, industry specific solutions and 2) marquee client base. Rising adoption of
BRLMs: IIFL Securities, Nomura
Financial Advisory and technology in T&H industry and increasing demand for third-party technology
Securities vendors due to COVID-19 is likely to double serviceable market to $8.45 bn in
Issue Size: Rs. 1,291 Cr - Rs. 1,336 Cr CY25E for RateGain.
Numbers of Shares: 31,878,318 – 31,441,282
Face value: Rs 1 Revenue decreased by 37% in FY21, impacted by covid-19. Signs of recovery
Bid lot: 33 Shares in T&H industry are visible as number of active customers for RateGain grew
Employee Equity Shares aggregating by robust 9% in H1FY22 vs FY21. It showed strong operating performance
Reservation upto ₹ 5 Cr.
with adjusted EBITDA margins at 9.44% in FY21 vs 7.97% in FY20. In spite of
revenue decline, underlying business metrics remained healthy with steady
Indicative Timetable
gross revenue retention, increase in active customer count, healthy gross
Activity Date
margins and increasing NPS scores.
Finalisation of Basis of Allotment: 14-12-2021
Refunds/Unblocking ASBA Fund 15-12-2021 The IPO comprises a fresh issue of Rs3.75 bn and OFS of up to 22.6 mn (up
Credit of equity shares to DP A/c 16-12-2021 to Rs9.60 bn) shares by selling shareholders (Exhibit 5 details use of offer
Trading commences 17-12-2021 proceeds). Price band of Rs. 405-425 implies P/S of 18x on FY21 sales (of
Rs2.5bn). Global vertical SaaS peers are trading at average P/S of ~14x FY21
Issue Structure sales. We believe premium valuations are justified given - 1) its superior
QIB 75% product portfolio integrated across all value chain partners enables it to
NIB 15% access data at granular level which cannot be easily replicated and 2) highly
Retail 10% predictable, scalable and profitable business model. We recommend
investors to subscribe for long term gains. Risks: 1) revenue dependent on a
Issue Details single industry (T&H), 2) high client concentration and 3) considerable
Pre-issue equity shares 9,79,22,360 contingent liabilities
Post-issue equity shares* 10,67,58,112
Post-issue Market Cap (Rs Crs)* Rs 4,537  Comprehensive, inter-operable, innovative industry specific solutions:
Post-issue Market Cap (Rs Crs)# Rs 4,341 RateGain’s artificial intelligence (AI) powered SaaS platform has presence
* Upper Band / # Lower Band across the entire value chain of travel & hospitality industry, from acquiring
guests to improving retention and maximizing revenue potential. RateGain has
developed inter-operable products which provides access to vast amount of
Object of the Issue
data across products. Depth of business intelligence data fed into deep
Fresh Issue of Equity shares aggregating upto ₹ learning AI models enables RateGain to create innovative use cases and drive
375 Cr. and Offer for sale of 22,605,530 Equity
shares competitive differentiation.
 Marquee client base to provide more cross selling opportunities:

Shareholding Pattern
RateGain has access to a marquee global customer base, like i) 7 global car
(%) Pre-Issue Post-Issue
rental companies, ii) major cruise lines & the largest travel management
Promoters 65.42% 55.01%
company, iii) 23 of the top 30 hotel chains, iv) 25 of the top 30 OTAs & several
Public 1.87% 1.71%
of the world's fastest-growing airlines. It focuses on improving its net promoter
Others 32.71% 43.28%
score (NPS) by benefiting from long-term relationships, and emphasis on
Aniket Pande selling bundled contracts. This reflects in its high gross revenue retention rate
[email protected] | 91-22-66322300 of 95.5%/89.2% in FY20/FY21, respectively & also seven of its top ten clients
Aditi Patil have been customers for 10+ years & Sabre GLBL Inc. has been a customer
[email protected] | since 2003. This all provides RateGain with opportunities to cross-sell to
existing customers and expand into new customers.
December 2, 2021 1
About the Company

Leading global SaaS player in hospitality and travel
vertical
RateGain’s competitive intelligence
products tracked over 5.83 bn price
RateGain is a SaaS company in hospitality and travel industry offering solutions
points across over 2,900 hotels,
OTAs, airlines, cruise lines and car across wide spectrum of verticals including Hotels, Airlines, OTAs (Online Travel
rentals, as of June 30, 2021 Agents) & METAs (Meta search engines), vacation rentals, package providers, car
rentals, rail, travel management companies, cruises and ferries etc. with a suite of
inter connected products that help clients in revenue creation and margin
maximization. It has 1,434 clients including 8 Global-500, 1,186 large & mid-size
hotel chains, 104 travel partners including airlines, 7 car rental companies & large
cruise companies and over 144 distribution partners including OTAs & GDSs in
over 110 countries. SaaS products are classified under three business units— (1)
DaaS (Data as a Service), (2) Distribution and (3) MarTech (Marketing Technology).
RateGain started in 2004 with a ‘competitive intelligence price comparison product’

for hotels. Since then it expanded the product portfolio to include artificial
intelligence and machine learning capabilities that leverages in-house data lake to
offer products in areas of rate intelligence, cognitive revenue management, smart
distribution and brand engagement.
Sharp decline in revenue in FY21 due to COVID led slowdown in

travel & hospitality industry
FY19 FY20 FY21
Revenue mix
DaaS 49% 31% 37%
Distribution 51% 50% 49%
MarTech 0% 19% 14%
Revenue (Rs. Mn)

DaaS 1,294 1,254 934
YoY gr. -3% -26%
Distribution 1,322 1,994 1,218
YoY gr. 51% -39%
MarTech 0 740 356
YoY gr. -52%
Total 2,616 3,987 2,508
YoY gr. 52% -37%
Source: Company, PL
Geography mix
FY19 FY20 FY21
Revenue mix
North America 62% 72% 65%
Asia-Pacific 12% 12% 15%
Europe 20% 11% 15%
Others (excluding India) 6% 4% 5%
Source: Company, PL
December 2, 2021 2
Business Segments
RateGain’s SaaS platform and products for hospitality and travel industry are
classified into three strategic business units.
RateGain’s distribution platform has
covered over 191,000 hotel  Data as a service (DaaS): RateGain connects suppliers and demand
properties with over 70 demand providers with data and information in order to increase acquisition and
partners, as of June 30, 2021.
conversion. It covers entire set of data points such as pricing, ratings, rankings,
availability, room descriptions, cancellation policy, payment policy, discounting
and package inclusions. It operates on a subscription model wherein
customers subscribe to DaaS products such as Optima and Parity+ which offer
data under two categories:
 Market Intelligence: RateGain provides access to pricing and availability

data at scale along with analytics to present trends, opportunities and
market developments.
 Dynamic Pricing Recommendation: RateGain serves certain segments

within the travel industry that have traditionally used a flat pricing or a
seasonal pricing structure with proprietary dynamic pricing technology to
help them maximize revenue.
 Distribution: Technology infrastructure platform helps hotel chains and

demand partners such as online travel agents, GDS providers and corporate
travel agents communicate availability, rates, inventory as well as process
bookings. It helps hotels to sell the right product at the right price on the right
channel by serving the right content through demand partners. RateGain has
two products in this space:
 RezGain: It is an AI enabled smart distribution channel manager that helps

distribute, availability, rates, and inventory and generates additional
revenue opportunities.
 DHISCO: DHISCO Switch provides mission critical connectivity which

enables hotels to drive reservations connects the hotel and hospitality
chains with demand channels using advanced switch technology.
As per the HotelTech Report,  Marketing Technology (“MarTech”): Rategain is a ‘single source provider’ of
RateGain is the number one Social
social media management to leading hospitality and travel brands including
Media Management provider for
hotels globally as of June 30, 2021. well-known luxury properties. It offers real-time social listening and guest
communication, active management of their social assets and campaign
management through AI based solution which helps increase awareness,
engagement and sales. It also helps in personalization of guest experience.
Pricing of “MarTech” solution is on subscription basis.
December 2, 2021 3
RateGain’s products and solutions spanning across travel and hospitality industry
Real-time competitive and parity intelligence for hotel and travel suppliers to stay competitive and
DaaS
optimize revenues
Competitive Intelligence tools
Air Gain Airfare pricing intelligence
CarGain Car Rental pricing intelligence
FerryGain Ferry pricing intelligence
Optima Hotel pricing intelligence
Rate intelligence (for tour
Customized pricing intelligence for OTAs
operator and package providers
Rate Parity
Parity + Hotels rate parity solution
AirGain Parity Watchover Airlines rate parity solution
Parity Watchover OTAs rate parity solution
Revenue maximization
Rev.AI Packages Travel package price management system
Rev.AI Car Car rental price management system
Rev. Cruise Cruise price management system
Demand.AI Demand forecasting tool
Technology infrastructure for hotel chains and demand partners communicate availability, rates,
Distribution
inventory and as well as process bookings
AI enabled smart distribution channel manager that helps distribute availability, rate and inventory and
RezGain
generates additional revenue opportunities
Mission critical connectivity between hotel/hotel chains and demand channels using advanced switch
DHISCO Switch
technology
Provides hotels and hospitality chains an ability to discover and receive recommendations on new demand
Smart Distribution
opportunities, auto contract with new channels using advanced switch technology
Provides access to large inventory of accommodation providers to travel sellers like OTAs, travel management
Distribution for travel sellers
companies, GDSs and wholesalers
MarTech Social media management for hospitality and travel industry
Targeted content marketing Develop customized social media strategy
Operations Support Tech enabled solutions captures relevant interactions and allows users to engage with guests in real-time
Analytics and reporting Platform to capture analytics for each hotel partner across social media channels
Source: Company, PL
December 2, 2021 4
Offer Details
The IPO comprises a fresh issue of Rs4 bn and offer-for-sale (OFS) of 22.6 mn
shares by selling shareholders. Net proceeds will be used towards 1) Servicing debt
& deferred payment obligations, 2) Funding growth initiatives, 3) Capital
expenditure and 4) General corporate purposes.
Offer details
Fresh Issue (Rs. 3,75 Cr) Upto 9,272,788# - 8,335,752* Equity Shares
Offer for Sale by Selling Shareholders Up to 22,605,530 Equity Shares
Bhanu Chopra – Promoter Selling Shareholder Upto 4,043,950 Equity Shares
Megha Chopra – Promoter Selling Shareholder Upto 1,294,760 Equity Shares
Wagner Ltd - Investor Selling Shareholders Upto 17,114,490 Equity Shares
Usha Chopra – Other Selling Shareholders Upto 152,330 Equity Shares
Source: Company, PL, Note: # lower price band and * upper price band
Utilization of net proceeds

Total estimated
Utilisation of net proceeds
amount (Rs mn)
Repayment/prepayment of indebtedness availed by RateGain UK, one of our Subsidiaries, from Silicon Valley Bank 864.3
Payment of deferred consideration for DHISCO acquisition 262.4
Strategic investments, acquisitions and inorganic growth 800
Investment in technology innovation, artificial intelligence and other organic growth initiatives 500
Purchase of certain capital equipment for our Data Center 433.3
General corporate purposes* [●]
Net Proceeds [●]
Source: Company, PL
Note: Amount utilized for general corporate purposes will be finalized upon determination of the Offer Price and shall not exceed
25% of the Net Proceeds of the Fresh Issue.
Selling shareholders
Pre-offer Post-offer
% of Total No. of shares % of Total
Shareholders Number of Equity Number of Equity
offered
Equity Shares Share Equity Shares Share
Capital Capital
Promoter 6,40,64,520 65.42% 53,38,710 5,87,25,810 55.01%
Promoters Group 18,27,960 1.87% 0 18,27,960 1.71%
Total for Promoter and Promoter Group 6,59,82,480 67.29% 53,38,710 6,05,53,770 56.72%
Public – Investor Selling Shareholders 2,46,47,280 25.17% 1,72,66,820 73,80,460 6.91%
Public - Other 73,82,600 7.54% 0 3,88,23,882 36.37%
Total for Public Shareholder 3,20,29,880 32.71% 1,72,66,820 4,62,04,342 43.28%
Total Equity Share Capital 9,79,22,360 100.00% 2,26,05,530 1,07,58,112 100.00%
Source: Company, PL,
December 2, 2021 5
Investment Argument
Comprehensive, inter-operable, innovative industry
specific solutions
The company was awarded HSMAI
Europe Region Best Technology
SaaS offerings covering entire value chain: RateGain’s artificial intelligence (AI)
Innovator Award in 2019 for its
Market DRONE product. powered SaaS platform includes a suite of inter-connected products, which assist
customers in the revenue creation value chain – 1) acquire guests across multiple
channels, 2) increase retention through personalized guest experiences and 3)
maximize revenue potential. RateGain’s solutions help hospitality and travel
companies find the right guest, decide the right price, distribute it to preferred
channel of the guest and once converted, helps them have an exceptional
experience. Its architecture is scalable and flexible to meet demands of customers
and can be deployed at scale to support vast amounts of data.
According to LATKA, RateGain is the
largest SaaS Company in the
Interoperable products provide access to vast amount of data and unlock
hospitality and travel sector in India.
value through integration: Integration of products with major property
management systems (“PMS”), central reservations systems (“CRS”) and revenue
management systems (“RMS”) and long-tail channels such as tour operators, GDS,
bed-banks, wholesalers and OTAs, allow RateGain to access data at a level that
cannot easily be replicated. The company has developed inter-operable products
which benefit from data collected across other products thus helping bridge the data
gap across highly fragmented travel and hospitality industry as well as provide
cross-selling opportunity. For example, the company feeds data from DaaS
products into its AI based products such as Rev.AI, which enables to better predict
future. Similarly, depth of business intelligence data is used to make MarTech
vertical more efficient. This has led to creation of innovative cross use-cases across
products that cannot be easily replicated.
RateGain’s MarketDRONE is a first of
its kind AI-enabled tool that provides
The interoperability of products displaces point solutions with bundled
instant reporting on intra-day rate
changes. Hoteliers are able to access offerings. For example, to assist customers that require both rate intelligence and
rate change data as it happens distribution capabilities. It has launched Demand.AI that provides an aggregated,
without scheduled reports, even on real-time view of demand based on data-mining across various silos including
their mobile device, unlocking last
internet searches, flight activity, local COVID-19 lockdown rules, booking engine
minute revenue opportunities that
previously may have remained inventory and pricing data. Using this tool, hotel customers can gauge predicted
untapped. demand for a particular property. Customers are also able to generate granular
information to manage demand fluctuations in its vicinity and for similar category of
hotel rooms.
Large data-sets with deep learning AI models are difficult to replicate for
competitors: RateGain’s DHISCO distribution platform is one of the largest
processors of electronic hotel transactions and it is one amongst few travel
technology companies to provide end to end support from Data & Decision through
distribution and marketing technology. Gathering of data across all supplier sectors
and geographies forms basis of AI models that become more powerful as the data
models grow. As the models consume more data, they improve and can spot
relationships humans cannot uncover. Once a company begins saving data and
building these models, it becomes increasingly difficult for other companies to catch
up.
December 2, 2021 6
RateGain’s inter-operable products integrated across a single platform not only

allow customers to maximize their revenues but also result in cost savings by
enabling better, faster and automated decision making. Its comprehensive
portfolio, inter-operable nature of products enables it to create innovative use cases
and drive competitive differentiation.
Industry challenges addressed by RateGain’s products
Source: Company, PL
Innovative AI driven industry relevant SaaS solutions

Products Details
Real-time cognitive rate intelligence solution, tracks the intra-day rate and rate plan changes by
Market Drone
competitors in real-time
RezGain provides CRS ("Central Reservation Systems") level connectivity, automated currency
RezGain conversion, productivity reporting, business intelligence and content management. It covers over 190,000
hotel properties and processed 7.46 million bookings.
DHISCO DHISCO is a two-way channel connects that connects over 70 demand partners.
Smart Distribution tool allows customers to effectively discover new demand, automate contracting with
Smart Distribution tool new channels, set content and rates automatically, optimize the channel mix and thereafter distribute
across various channels.
A self-serve unique SaaS solution powered by AI to help businesses track hyper-local demand at a city
Demand.AI
level and optimize their commercial strategy and ensure better ROI.
Content distribution tool, Content.AI, tracks content related KPIs such as amenities, images and room
Content.AI types to identify potential gaps and provides actionable insights to hotels. It is able to transform content and
augment imagery that increases the chances of conversion on demand platforms.
AirGain, CarGain and FerryGain are pricing intelligence products that are custom created for the airline, car
AirGain, CarGain and FerryGain
rental and cruise and ferries industry respectively.
Source: Company, PL
RateGain’s platform bridges the data gap across hospitality and travel industry
Source: Company, PL
December 2, 2021 7
Interoperable nature of products provides significant opportunity to cross-sell

DaaS Distribution MarTech Comments
26.38% of RateGain's DaaS customers used its Distribution products while 10.52% use its
DaaS 26.38% 10.52%
MarTech solutions
33.01% of RateGain's Distribution customers used DaaS products and 12.62% used
Distribution 33.01% 12.62%
MarTech solutions
50.41% of RateGain's MarTech customers used DaaS products and 48.35% used its
MarTech 50.41% 48.35%
Distribution products.
Source: Company, PL
RateGain’s bundled offerings
Source: Company, PL
Globally diverse, marquee, long-standing clientele
Diverse global customer base: RateGain has diverse global customer base of
1,434 customers including eight Global Fortune 500 companies comprising of both
travel suppliers and travel intermediaries. It serves almost all top players in
respective sub-segments such as 1) 25 out of the top 30 OTAs, several of the
world’s fastest-growing airlines, 2) 23 of the top 30 hotel chains, 3) tour operators
and wholesalers, 4) 7 global car rental companies, 5) all large cruise lines, and 6)
largest travel management companies.
RateGain works with leading large and mid-size chains including the
InterContinental Hotels Group, Kessler Collection, a luxury hotel chain,
Lemon Tree Hotels Limited and Oyo Hotels and Homes Private Limited along
with independent hotels. It also works with leading OTAs such as GroupOn and
Distribution companies like Sabre GLBL Inc.
High customer retention rates: Company’s AI enabled platform and technology

focused offerings, 24x7 customer support, quick resolution of issues and customer
feedback mechanism to improve customer satisfaction has led to consistent
customer retention rates. For example, 7 out of top 10 customers have been with
the company for more than 10 years and certain key customers including Sabre
GLBL Inc., have been associated with the company since 2003. Gross Revenue
Retention has consistently remained high at 92.78%/95.46%/89.24% in
FY19/20/21, respectively.
December 2, 2021 8
Active customers increased by 125 in 6MFY22

FY19 FY20 FY21 6MFY22
Overall Active customers 1,190 1,274 1,337 1,462
Customer Additions 84 63 125
Active customers in DaaS business 945 1083 1160 1406
Customer Additions 138 77 246
Active customers in Martech solutions 384 242 341
(142) 99
Gross revenue retention rate 93% 95% 89%
Source: Company, PL
Reduction in client concentration risk

Revenue mix FY19 FY20 FY21
Top 5 29% 33% 26%
Top 6-10 13% 11% 11%
Top 10 42% 44% 37%
Source: Company, PL
DaaS case study: Rate recommendation solution for mid-segment hotel chain in North America
Source: Company, PL
Smart distribution case study of one of the world’s largest hotel chains
Source: Company, PL
December 2, 2021 9
Channel Manager case study of a hotel management chain in Southeast Asia
Source: Company, PL
MarTech case study of revenue generation through Social Media for a luxury hotel in Mexico
Source: Company, PL
Strong operational performance & successful track-

record of M&A
Company showed strong operating performance with adjusted EBITDA margins at

9.44% in FY21 vs 7.97% in FY20 despite 37% YoY decline in revenue due to impact
of COVID in FY21 led by cost rationalization measures such as: 1) temporary salary
reductions, hiring freeze and furloughs (furloughed employees were later brought
back), 2) negotiated contracts with vendors globally, and 3) curtailed travel
expenses and rationalized sales and marketing expenses. Net cash generated from
operating activities was also healthy at INR 206.04 mn in FY21 +7.7% YoY.
December 2, 2021 10
RateGain’s products are developed in-house through centralized group of software

development, product management and data science talent which offers high
operating leverage as employee costs as % of revenue will decrease, as revenue
from SaaS based products and platform scale up.
Track record of successful strategic M&As: Strong balance sheet position

(check for off-balance sheet liabilities) empowers RateGain to make strategic
investments and consolidate its position by acquiring brands, complementary
technologies and product lines. RateGain has proven track record of successful
M&As. For example, it acquired DHISCO with operations in North America and
Europe in 2018, integrated it with RateGain’s proprietary technology, expanded it
to hotels and OTAs in Asia, maintained and grew its existing customer base.
Similarly, it acquired BCV (MarTech), a marketing technology company in 2019 and

has extended offerings to customers globally, migrated Centre of Excellence (CoE)
from the United States to India that resulted in margin expansion. Post-acquisition
and with the installation of CoE across multiple functions, RateGain has deployed
MarTech offerings in other regions. It offers MarTech product as a bundle to existing
clients along with other products to increase unit ticket value of commercial
relationship.
Recently, RateGain acquired Myhotelshop, a German company which offers

reporting, bid management and campaign intelligence platform for metasearch
publishers and other travel products that enables hotel suppliers, OTAs, and
agency clients to reach more customers at higher returns. Myhotelshop will boost
both RateGain’s revenue and profitability as it posted revenue of INR 503.3 mn
(20% of RateGain’s revenue) and PAT margin of 21% in FY21.
December 2, 2021 11
Competitive landscape
RateGain is unique in terms of 1) its specific breadth of supplier coverage, 2) its

breadth of functional coverage, 3) its ability to gather and leverage vast amounts of
travel data for its AI models, and 4) its ability to use that data to create actionable
business intelligence for its customers. The company has offerings in hotel vertical
with strong placements in Hotel Tech Report rankings. It is one of the few players
with presence across DaaS, Distribution and digital marketing (MarTech).
In DaaS business, it competes with TravelClick, OTAinsight and Fornova in hotel

segments while it competes with InFare in the airline segment. In car rental segment
its primary competitor is RateHighway while for OTAs it competes with Fornova.
In Distribution business, DHISCO and RezGain compete with Siteminder,

DerbySoft and TravelClick all focused on hotel segments.
There are limited scaled participants in the digital marketing industry that are
focused on hospitality and travel industry. Typically, this is done in-house or social
media agency is engaged by the hotel.
RateGain’s BCV (MarTech) tops the
list in Hotel Tech Report’s social RateGain’s offerings in the hotel vertical have strong placement
media category (ranking 1/19).
in Hotel Tech Report Rankings
Category Product Rank
Rate Shopping/Marketing
OPTIMA 4th rank among 29 other global competitors
Intelligence
Channel Managers RezGain 7th rank among 77 other competitors
Parity Management RateParity+ 4th rank among 9 other competitors
Social media BCV 1st rank among 19 other competitors
Source: Company, PL
Competitors in DaaS platform

RateGain's DaaS
DaaS OTA Insight Fornova Paraty Tech Rate-Highway
product
Rate-Monitor, car rental
Competitive and Booking Engine; revenue management;
Market and price rate
Market and price distribution intelligence; Revenue Management; Additional services
Products / intelligence; tracking
intelligence; Dynamic e-commerce optimizer; Web and Online including technical
Offerings parity performance and
Price recommendation revenue intelligence and Marketing; Loyalty integration, training, and
PMS analytics
operational analytics Clubs; Ring2Travel custom reporting and
analytical services.
Travel and hospitality
verticals: hotels, airlines,
OTAs and METAs
vacation rentals, Hotel groups, OTAs, Car
Verticals package providers, car Single/Multiple Property rental companies, Hotels
rentals, rail, travel Booking sites
management
companies, cruises and
ferries.
Clients 1,188 50,000 50,000 Over 3,000 Unknown
USD 22.2 million in
Revenue USD 12.6 mn in FY21 £ 10.3 million in 2018 Unknown US$3.34 Million in 2021
2019
Funding USD 20 million USD 26 million Unknown Unknown
Employees 191 51-200 11 to 50 11 to 50
HQ New Delhi, India London London Málaga, Spain Irving, California
Founded (Year) 2004 2012 2010 2011 2003
Source: Company, PL
December 2, 2021 12
Competitors in Distribution platform

RateGain's
Distribution Travel Click SiteMinder DerbySoft Infare
distribution product
Airline network
Media solutions;
Integrated distribution management and route
reservations & booking Channel manager;
channel management, Streamlined planning; Airline
engine; central booking engine;
CRS (Central connectivity; property revenue management
reservations system; website design;
Reservation Systems) connect; marketing and pricing teams;
Products / Offerings property management; business insights; hotel
level connectivity, services, WeChat Mini Data-driven market
guest management metasearch hotel
business intelligence Program Provider; pricing insights;
solutions; business payment processing;
and content Content services comparative analysis
intelligence; service GDS distribution
management. and benchmarking for
optimization
tour operators
Hotels, gaming,
Independent and chain Airlines, Airports,
Verticals Hospitality exhibition, events and Hotels
hotels Travel Agencies
banquets
144 distribution Top 10 global hotel
partners including groups; all leading
OTAs such as third-party Central
GroupOn and Reservation Systems
Over 250 airlines
Clients distribution companies 52,000 35,000 and hundreds of
worldwide
such as Sabre GLBL regional hotel chains of
Inc., in over 110 all sizes throughout
countries as our Europe, China and
customers, North America.
USD 373 million in AUD 100 million in Estimated USD 19.4
Revenue USD 16.2 mn in FY21 Unknown
2017 2019 million per year
Acquired by Amadeus Infare has acquired Air
Funding NA USD 105.3 million USD 30.5 million
for USD 1.5 billion Cube on May 5, 2021
Employees 1001-5000 501-1000 251-500 51-200
HQ New Delhi, India New York, US NSW, Australia Dallas, Texas Copenhagen, Denmark
Founded (Year) 2004 1999 2006 2002 2000
Source: Company, PL
Competitors in MarTech platform

RateGain's MarTech Destination Think Lodging Interactive Casual Fridays Pandemic Labs
Full-service digital
Social Media
HotelSiteXPRESS – marketing including
Monitoring;
hotel websites; Digital Marketing digital strategy; content
Reputation
Commingle Engage – Strategy; Social Media production;
Management; Destination strategy;
social media marketing Ads; Social Media & measurement &
Expansion of Social Destination branding;
Products / and reputation Reputation analytics; social media
Platforms; Creative platforms;
Offerings management; Management; Content management; digital
Social Media Tourism Sentiment
Omnichannel Marketing; Influencer media planning &
Advertising; Index
Marketing; Dining Click Marketing; Video buying; content audits;
Social Media Influencer
– ADA-compliant dining Marketing & Production influencer marketing;
Engagement and
menus events, experiences &
Management;
activations
Hotels, restaurants, Hospitality; tourism; Lodging; cruises;
DMOs, NTOs, CVBs
Verticals Travel & Hospitality spas, management non-profit; education; DMOs; non-hospitality
and events
companies entertainment brands
Over 65 hotel
management
Global client roster
companies and nearly
includes some of the
700 hospitality
most well-known
Clients ~311 Over 100 properties worldwide, Unknown
brands in the world,
including luxury
especially in the travel
independent hotels and
industry.
resorts and branded
properties.
USD 5.55 million in
Revenue USD 4.8 Million USD 5 Million USD 1.80 million USD 860,514
2021
Funding NA Unknown Unknown Unknown Unknown
Employees 11 to 50 51-200 11 to 50 11 to 50
HQ New Delhi, India Vancouver, BC Parsippany, NJ San Diego, California Boston, Massachusetts
MarTech was started in
Founded (Year) 2019 via acquistion of 2009 2001 2009 2007
BCV
Source: Company, PL
December 2, 2021 13
RateGain has presence across revenue maximization value chain

RateGain OTAInsight Fornova TravelClick SiteMinder DerbySoft
DaaS √ √ √ √ √
Distribution √ √ √ √
MarTech √
Source: Company, PL
Peer financials & valuations
There are no listed companies in India that engage in a business similar to that of
RateGain. We have compared financials and valuations of global Vertical SaaS,
global Travel Tech, India B2B Tech peers in listed space.
Price band of Rs. 405-425 implies P/S of 18x on FY21 sales of Rs2.5bn. Global
vertical SaaS peers are trading at P/S of ~14x FY21 sales. We believe premium
valuations are justified given - 1) its superior non-replicable product portfolio and 2)
highly predictable, scalable and profitable business model.
Peer Financials
Revenue (USD mn) Revenue growth YoY EBITDA margin PAT
CY19/ CY20/ CY21/ CY22/ CY23/ CY19/ CY20/ CY21/ CY22/ CY23/ CY19/ CY20/ CY21/ CY22/ CY23/ CY19/ CY20/ CY21/ CY22/ CY23/
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
Travel Tech
company
Amadeus 6,236 2,482 3,189 5,110 6,244 7% -60% 28% 60% 22% 43% 14% 25% 37% 41% 1,246 -714 -60 806 1,252
Vertical SaaS
Companies
Freshworks 172 250 366 484 637 45% 47% 32% 31% -13% -18% -1% -10% -4% 1,351 -500 -4 -51 -25
Zendesk 816 1030 1333 1688 2107 36% 26% 29% 27% 25% -11% -7% 10% 10% 13% -170 -218 -218 -217 -191
Veeva 1104 1465 1835 2185 2576 28% 33% 25% 19% 18% 21% 21% 23% 35% 34% 301 380 446 530 654
Guidewire 742 743 786 868 868 3% 0% 6% 10% 12% 6% 4% -7% -1% 2% -27 -67 -150 -135 -88
Source: Company, PL, Note: Zendesk, Amadeus, Freshworks follow Dec year ending, Guidewire follows July year ending and Veeva
follows Jan year ending
Peer Valuations
Price/Sales
CY20/FY21 CY21/FY22E CY22/FY23E CY23/FY24E
Travel Tech
Amadeus 11.9 9.3 5.8 4.7
Vertical SaaS
Freshworks 4.8 3.2 2.5 1.9
Zendesk 12.1 9.3 7.4 5.9
Veeva 26.7 21.3 17.9 15.2
Guidewire 13.2 12.5 11.3 10.1
Average 13.7 11.1 9.0 7.5
RateGain 18.1 13.6 10.0 7.8
Source: Company, PL
December 2, 2021 14
Key Strategies
Growth levers for the future:
RateGain intends to leverage its well-
entrenched relationships with its  New product development capabilities: RateGain invests in products used
customers to add additional verticals by travel companies in post COVID-19 era. These AI-led products will offer real
that will allow it to grow revenues at
time intelligence and make pricing recommendations for revenue
minimal customer acquisition costs.
maximization.
 Land and expand: RateGain focusses on mining existing customers through

bundling which will add to stickiness. It will also present customers with a
platform option for vendor consolidation.
 Penetration: RateGain will continue to expand enterprise sales infrastructure

in specific segments to increase penetration in areas such as MarTech and
certain categories within DaaS and Distribution.
 Go-to-market at scale: RateGain will continue to build its network for

integrating products with regional niche players that will leverage RateGain’s
capabilities to strengthen their respective offerings to their customer base.
RateGain plans to expand into

adjacent verticals within the travel Expand further in to Care Rental Segment: RateGain believes that there is an
industry such as car rentals that rely opportunity for pricing solutions among existing car rental companies globally given
on the same product set to guide their that there are limited means for the industry in terms of distribution channels unlike
businesses.
airlines and hotels. The company has recently launched the pilot for its Rev.AI
product focused on car rental segment that intends to replace static pricing
mechanisms with dynamic pricing recommendations to optimize yield, generate
demand through cohort promotions and enhance utilization through inventory
management.
Partnerships and alliances to be a key growth lever: RateGain intends to cost-

effectively expand into adjacent verticals and new geographies through partnership.
For example, in Feb 2021, it entered into a global strategic partnership with IDeaS,
a leading provider of revenue management software and services, to deliver real-
time and AI-powered rate intelligence to its customers globally. RateGain’s
significant data assets and cross-product insights have helped cement this
partnership and will allow customers to improve their operational efficiency, receive
on-the-go updates, and optimize revenue management strategies against their
competitors set by leveraging real-time market data.
Expand MarTech solution: MarTech offers end-to-end social media management

solution. RateGain aims to further expand MarTech and capitalize on changing
social media management needs as guest traveler engagement with travel
suppliers is being re-invented in the post COVID-19 scenario. MarTech aims to
expand offerings into following segments:
 Social Media Monitoring: RateGain aims to upscale and add luxury hotels in
key geographies so that social media interactions by users with customers do
not go unengaged. Addressable market for this segment currently is about
92,000 hotels globally while RateGain had 242 active customers in this
segment as on FY21.
December 2, 2021 15
 Reputation Management: As customers tend to rely more on other client’s

reviews, social reputation needs to be managed and supplier side of any
service recovery will need to be promptly published to acknowledge, and
present suppliers point of view.
 Social Media influencer and engagement management: RateGain intends

to build capabilities and make influencer commerce seamless for travel
suppliers
 Social Media Advertising: The company plans to leverage its data lake to
prepare ad campaigns based on city demand, prevailing rates and source
markets where demand is originating from. This differentiates it from other ad
campaigns based on blanket mandates.
 Expansion of Social Platforms: RateGain aims to expand its channel

coverage based on new social platforms that gain traction and become a viable
means of social media communication for target segment.
Leverage unique data assets to create new AI product offerings: RateGain

intends to continue leveraging extensive data assets through introduction of
additional product offerings based on latest technologies. Its focus will be to
enhance its cross-product use cases such as Market Drone, Demand.AI and Smart
Distribution.
The company has set up RateGain Labs, an in-house incubator that will leverage
existing expertise to solve current travel industry problems through data, proximity
to clients and business experience. RateGain labs have 15 full-time employees and
is led by Promoter, Bhanu Chopra. It will continue to innovate travel and hospitality
industry through this initiative.
December 2, 2021 16
Industry Snapshot
The travel and tourism sector bore the brunt of the pandemic in 2020. Global travel
spending dropped 61% YoY from $1432 bn to $556 bn in CY20. With improving
pace of vaccinations and easing travel restrictions, Phocuswright expects sharp
recovery in global travel & hospitality industry with growth on 22.8% CAGR over
CY21-24E to reach $1383 bn in CY24E. Leisure travel witnessed faster recovery,
resulting in an increase in the share of leisure travel to 82% of total travel spend in
2020 vs 78% in 2019, according to WTTC. This is positive for RateGain given it
generated 94.8% of its FY21 revenue from leisure travel.
According to Phocuswright and McKinsey survey of 899 C-Level executives

conducted in 2020, COVID-19 has significantly accelerated pace of digitization
across industries including travel and tourism. Online portion of the travel market
has grown from 26% in 2010 to nearly 52% in 2020. Pandemic accelerated the shift
and online is further estimated to reach 56% by 2024. Mobile part of the online
travel market and has grown from a miniscule 0.2% to nearly 47% in 2020 as
travelers adopted technology across the travel lifecycle.
Global online travel market to grow at 24% CAGR over 21-24E
Total Travel Market

Online (Leisure/Unmanaged Business)
Online Penetration (%)
54% 55% 55% 56%
1600 52% 60%
49%
1400 45% 50%
1243 1383
1200 1432 1023
1000 1413 40%
745 770
800 650 697 685 30%
556 558
600 402 20%
400 292
200 10%
0 0%
2018 2019 2020E 2021E 2022E 2023E 2024E
Source: Company, PL
December 2, 2021 17
All sub-segments in travel and hospitality are expected to grow at accelerated pace post sharp fall in CY20
Gross bookings (USD Bn) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E
Global Hospitality industry 442 458 485 515 520 233 307 406 479 522
YoY growth 4% 6% 6% 1% -55% 32% 32% 18% 9%
Global Vaccination Rentals industry NA NA 79 82 85 60 71 85 95 101
YoY growth 4% 4% -29% 18% 20% 12% 6%
Global OTA industry 180 200 227 259 281 120 169 229 280 315
YoY growth 11% 14% 14% 8% -57% 41% 36% 22% 13%
Global Airline Passenger gross bookings 522 528 571 618 626 203 266 396 499 571
YoY growth 1% 8% 8% 1% -68% 31% 49% 26% 14%
Global Car Rental industry 44 45 47 51 52 30 36 43 49 53
YoY growth 2% 4% 9% 2% -42% 20% 19% 14% 8%
Global Cruise industry NA NA 24 26 27 3 7 19 25 30
YoY growth 8% 4% -89% 133% 171% 32% 20%
Global Holiday Park, Camping and Caravanning industry 40 NA NA NA 50 40 45 51 NA NA
YoY growth -20% 13% 13%
Source: Company, PL
Key technology trends to shape travel demand
 Increasing use of mobile: Mobile part of online travel market was 47% in
2020 as travelers adopted technology across the travel lifecycle.
 Availability of multiple platforms for travel bookings, including OTAs,

supplier websites, meta-search websites, search engines and travel review
websites.
 Shift of activity booking to online: The in-destination segment that was once
characterized by last-minute, offline business is rapidly shifting online. In the
U.S., online penetration of tours, activities and attractions is expected to rise
from 32% in 2019 to 46% by 2022, reaching $14 billion.
In the global hotel industry, “High  Social media is gaining prominence shaping up demand for travelers:
Touch, not High Tech” has been
Social media plays a bigger role in mobile-first markets where social travel
replaced by “High Touch through
High Tech”. content influences travel decisions. In China and Indonesia, photos and videos
from friends or travel brands have influenced the travel decisions of
approximately two in three travelers.
Above key technology trends indicate growing digital adoption of end consumer
which will lead to sharp increase in adoption of technology by players in travel &
hospitality players. Phocuswright expects increasing adoption of technology in
below areas:
 Social media management: Social media is now one of the most important
customer acquisition channels. Companies like RateGain help them monitor
client’s comments (and selectively responded to), design promotional
strategies, manage influencer strategy, track consumer sentiment about both
the hotel and competitors etc.
December 2, 2021 18
On average hotel company IT  Electronic distribution of hotels: Within the hotel industry, distribution is
departments have laid off 40% of
considered to be communication of sales-oriented information (facilities, brand
their staff. Similar cuts have
happened in other departments affiliation, accommodation availability and rates) about a hotel. Even though
including Marketing & Sales, hotels have embraced technology for distribution, they remain a laggard for
Revenue Manager and Distribution. overall digitization, an increasingly important competitive requirement.
Hotel executives may use technology
in new ways that enable automation  Hotels prefer direct bookings by guest: Reservations booked directly on
of work that previously required hotel’s website are more lucrative for hotels vs other electronic distribution
human hands. channels. Hotels are thus investing in technology to offer smooth online
booking experience on their website.
 Hotel pricing and daily rate setting: Hotel room rate setting i.e. charging the
highest possible rate to get highest possible flow of new reservations in each
of the market segments while maintaining rate parity (preventing online travel
agents from under-cutting hotel rates) is very labour intensive and can be
solved using technology (example: Parity+ product of RateGain)
 Automating revenue management systems: Revenue Management

Systems are capable of accepting, analyzing and developing action
recommendations using considerably more data and evaluating many more
if/then scenarios than would ever be possible by Revenue Managers using
manual tools. Forecasting capability in the post-COVID-19 era is a challenge
which can be solved by incorporating near real time travelling trends in the
automated RMS system.
Migration of systems from “on-  Replacement of on-premise systems with cloud first approach: The
premise” to “cloud-based” with first
benefits of cloud-based systems to hotel operators includes centralized
generation cloud-native systems is
resulting in improved usability. updating of software by specialized technicians, reduced or eliminated need
for on-premises IT staff, computer room space freed for other uses and
reduced utility costs. Additionally, the cost of system use transformed from a
major initial capital expense followed by annual license fees to a monthly
operating expense. Moreover, the opportunities for interfacing, or going further
and deeply integrating, cloud-based systems are becoming increasing clear
and appealing.
 Use of analytics, business intelligence and data science to provide

insights and drive faster decision making: Hospitality industry is
increasingly focused on data. General Managers have become much more
focused on statistics as a performance measure; Revenue Managers apply an
unwavering priority to data collection, interpretation and presentation. And as
more and more data is collected and analyzed, hotel operators and their data
scientists are evaluating potential role of artificial intelligence to reveal insights
and prompt action.
 Global systems from global vendors and focus on anytime anywhere: The
combination of mobile devices – be smartphones or pads – and internet
access, has now enabled nearly unlimited “anytime, anywhere” system access
for these individuals. Increasingly, operations staff such as Revenue Managers
can adjust guestroom availability and rates in real time from any location and
at any time. Property managers can view activity statistics; property owners
can view financial data.
December 2, 2021 19
Addressable market to grow at 18% CAGR over 2021-25
There is a large and rapidly growing addressable market opportunity for a vertical
SaaS companies like RateGain. Phocuswright expects increased use of third party
vendors compared to in-house as COVID-19 has resulted in significant lay-offs, in
terms of technology talent in travel industry. Third party travel and hospitality
technology is estimated to be a US$ 5.91 billion market in 2021 growing to an
estimated U$ 11.47 billion in 2025 at a CAGR of 18%.
Total Addressable Market size is at USD 5.9Bn in CY21E and expected to grow at 18% CAGR over CY21-25E
USD Bn 2021E 2022E 2023E 2024E 2025E
OTA 17 23 28 32 34
Airlines 266 396 499 571 616
Hospitality 307 406 479 522 554
Vacation Rentals 71 85 95 101 104
Car Rental 36 43 49 53 56
Cruise 7 19 25 30 34
Holiday Parks 45 51 54 56 57
Total Revenue 749 1,023 1,229 1,365 1,455
Technology spend as % of revenue 3.94% 3.94% 3.94% 3.94% 3.94%
Technology spend 29.5 40.3 48.4 53.8 57.3
3rd party spend as % of total tech spend 29% 29% 29% 29% 29%
3rd party spend 8.6 11.7 14.0 15.6 16.6
Excluding hardware spends from 3rd party tech
5.9 8.1 9.7 10.8 11.5
spend
Source: Company, PL
Addressable serviceable market size for RateGain is $4.34 bn in 2021, growing to

an estimated US$ 8.45 bn in 2025 encompassing enterprise applications focused
on guest acquisition, distribution, revenue maximization and potential wallet share
expansion in hospitality and travel industry. The travel technology segment is
further favored by industry tailwinds of digitization in post COVID times.
Serviceable addressable market (SAM) to grow at 18% CAGR to

$8.45 Bn in 2025
SAM in US$ Bn 2021E 2022E 2023E 2024E 2025E
Current Products 3.70 5.06 6.07 6.75 7.19
Future Products 0.65 0.88 1.06 1.18 1.26
Total 4.35 5.94 7.14 7.93 8.45
Source: Company, PL
December 2, 2021 20
Financial Performance
Revenue impacted in FY21 due to COVID
Revenue decreased by 37.1% in FY21, primarily on account of impact of COVID-

19 pandemic on all three business segments. Revenue from DaaS segment
decreased by 25.51% in FY21, primarily due to customers seeking price reductions,
waivers and discounts on subscription products owing to RateGain’s long-term
relationships with such customers and reduction in the volume of data they sought
to contain costs. Revenue from Distribution segment declined by 38.90% in FY21,
primarily due to the reduced volume of hotel reservations and bookings due to
COVID-19 which significantly impacted revenues. Revenue from MarTech segment
decreased by 51.87% FY21, primarily due to customers requesting to pause their
subscriptions. Active count of hotel properties covered declined from 384 as of
FY20 to 242 as of FY21.
Sharp revenue decline of 37% in FY21 due to COVID
Revenue from operations
4,500
3,987
4,000
3,500
3,000 2,616 2,508
2,500
2,000
1,500
1,000
500
-
FY19 FY20 FY21
Source: Company, PL
Revenues diversified across three segments
MarTech DaaS Distribution
120%
100%
80%
51% 50% 49%
60%
40%
31% 37%
49%
20%
19% 14%
0%
FY19 FY20 FY21
Source: Company, PL
December 2, 2021 21
Strong growth in FY20 led by Distribution and MarTech

FY19 FY20 FY21
DaaS 1,294 1,254 934
YoY -3% -26%
Distribution 1,322 1,994 1,218
YoY 51% -39%
MarTech 740 356
YoY -52%
Total 2,616 3,987 2,508
YoY 52% -37%
Source: Company, PL
Pricing model of RateGain

Subscription model where customers in the hospitality sector subscribe to DaaS products for a fixed period. For certain
DaaS products DaaS products, it also operates on a hybrid model where it charges a minimum subscription fees for use of products and a
pay-per-use charge for accessing additional data.
Distribution
segment
RezGain Subscription model where customers pay a subscription fee to access the product.
DHISCO Operates on a transaction model where it generates revenues from bookings done by OTAs and GDS operators.
MarTech Subscription model
Source: Company, PL
EBITDA margin
RateGain showed strong operating performance with adjusted EBITDA margins at

9.44% in FY21 vs 7.97% in FY20 despite 37% YoY decline in revenue due to impact
of COVID in FY21 led by cost rationalization measures such as: 1) temporary salary
reductions, hiring freeze and furloughs (furloughed employees were later brought
back), 2) negotiated contracts with vendors globally, and 3) curtailed travel
expenses and rationalized sales and marketing expenses. Net cash generated from
operating activities was also healthy at INR 206.04 mn in FY21 +7.7% YoY despite
negative of – INR 286 mn.
Adjusted EBITDA margin improved by ~140 bps YoY despite

sharp decline in revenue in FY21
FY19 FY20 FY21
EBITDA 218 287 62
EBITDA margin 8.3% 7.2% 2.5%
Employee stock option expenses 147 30 113
Loss on foreign exchange fluctuation 8 1 62
Adjusted EBITDA 373 318 237
Adjusted EBITDA margin 14.3% 8.0% 9.4%
Source: Company, PL
December 2, 2021 22
EBITDA margins
EBITDA EBIT EBITDA margin EBIT margin
400 8.3% 10.0%

300 7.2%
287 5.0%
200
218 0.6% 2.5%
100 62
0.0%
15
0
FY19 FY20 FY21 -5.0%
-100 -3.5%
-200 -140 -297
-10.0%
-300 -11.9%
-400 -15.0%
Source: Company, PL
Enhance operating efficiency through investments in

technology
Technology infrastructure costs, i.e., hosting and proxy charges and software
subscription charges represented 14.86%/8.14%/10.82% of revenue in FY19/20/21
respectively. The company will continue to invest in technology to further enhance
its operations, which may increase operating costs but will improve operating
leverage, cost efficiency and service quality. Investments in technology will improve
customer experience for RateGain’s SaaS products plus improve the rate of
transactions and generate revenues.
Signs of recovery in FY22
RateGain’s operations were impacted on account of lockdowns imposed and travel

restrictions in FY21. However, with rising vaccinations and easing travel
restrictions, RateGain has witnessed an increase in OTA (Online Travel Agencies)
and GDS (Global Distribution Systems). The company also generated 96.48% of
its revenue from leisure travel in FY21. Gross revenue retention rate (% of renewed
revenue as compared to previous year) continued to remain stable at 89.24% in
FY21 vs 95.46% in FY20. Number of Active customers grew by robust 97 in just
first three months of FY22.
December 2, 2021 23
Active customers increased by 97 in 3MFY22
Active customers Additions
1,600 97 120
1,400 84
1,190 100
1,200
63 80
1,000
1,434
800 60
1,274
600 1,337
40
400
20
200
0 0
FY19 FY20 FY21 3MFY22
Source: Company, PL
Inorganic growth through strategic acquisitions
RateGain has track record of inorganic growth through strategic acquisitions that
supplement its business verticals. In FY19, it entered into an asset purchase
agreement to acquire selected assets and liabilities of DHISCO, a processor of
electronic hotel transactions that delivers connectivity and distribution solutions to
hotels. DHISCO business contributed INR 1,118.48 mn of revenue and incurred a
loss of INR 4.15 mn in FY19. In addition, in FY20 it also acquired BCV Social, a
marketing technology company. BCV Social contributed revenues INR 679.38 mn
and a loss of INR 288.28 mn in FY20. RateGain will continue making strategic
acquisitions and entering into new business ventures or initiatives.
Recently, RateGain acquired Myhotelshop, a German company which offers

reporting, bid management and campaign intelligence platform for metasearch
publishers and other travel products that enables hotel suppliers, OTAs, and
agency clients to reach more customers at higher returns. Myhotelshop will boost
both RateGain’s revenue and profitability as it posted revenue of INR 503.3 mn
(20% of RateGain’s revenue) and PAT margin of 21% in FY21.
Company has to comply with restrictive financial

covenants
Due to pandemic, the company was unable to meet certain covenants included in
its credit agreement with Silicon Valley Bank. This breach was eventually waived
by the bank and it set aside the current covenant requirement until June 2021. Bank
included a fresh set of financial covenants using forecasts that take into account
the impact of COVID-19 until June 2021. Additionally, principal amount payable for
three months ended June 2020 and six months ended Sep 2020 have been
deferred until the term loan maturity. RateGain proposes to prepay the entire
amount outstanding to Silicon Valley Bank (principal amount), from the
portion (Rs. 864.3 mn) of the net proceeds of the Fresh Issue in FY22.
December 2, 2021 24
Key Performance indicators

Key Performance indicators FY19 FY20 FY21 5MFY22
Annual Recurring Revenues (“ARR”) (Rs. mn)
DaaS 1,301.16 1,311.46 986.07 957
Distribution 1,889.21 1,813.64 1,202.82 1372.8
MarTech 0 922.39 441.25 676.8
Total 3,190.38 4047.49 2,630.14 3006.5
Active Customer Count
Hotels 957 1,034 1,098 1,220
OTAs 138 125 132 132
Airlines 17 28 31 27
Car Rentals 69 69 58 65
Others 9 18 18 18
Total 1,190 1,274 1,337 1,462
Average Revenue Per Customer (“ARPC”) (Rs. mn) 2.68 3.18 1.97 0.21
Gross Margins 80.21% 76.17% 79.46% 78.61%
Gross Revenue Retention (% of renewed revenue as compared to previous Fiscal) 92.78% 95.46% 89.24% 92.92%
Revenue by Engagement (%)
Subscription 30.07% 40.86% 44.16% 48.35%
Transaction 34.65% 35.06% 26.34% 27.19%
Hybrid 35.28% 24.07% 29.50% 24.47%
Recurring Revenues (% total revenues)
DaaS 97.00% 98.00% 97.00% 97.57%
Distribution 98.00% 97.00% 95.00% 97.37%
MarTech N.A. 98.00% 99.00% 99.80%
Customer Acquisition Cost (“CAC”) (Rs. mn) 0.9 0.98 0.93 0.07
Revenue per Employee (Rs. Mn) 7.45 6.31 5.91 0.59
Average Booking Value (Rs.) 20,134 16,339 15,733 24,123
Price Points Aggregated (DaaS) (mn) 5,009 6,559 5,834 299
Active Count of Hotel Properties (MarTech) N.A. 384 242 337
Source: Company, PL
December 2, 2021 25
Management Profile
Mr. Bhanu Chopra is the founder and executive chairman of RateGain. He has
rapidly grown the company since 2004. Mr. Bhanu Chopra earned his master’s
degree from Indiana University and began his career at Deloitte Consulting. His
inspiration for starting RateGain was the rising trend of online bookings and
increasing demand and popularity of online travel agents (OTAs). Both hotels and
OTAs identified the need to compare their room rates with the competition-set rates.
The company started with a ‘competitive intelligence price comparison product’ for
hotels and since then it expanded its product portfolio across value chain.
Mr. Bhanu Chopra has over 20 years of experience. He has been profiled on
"Young Turks" by CNBC-TV18 and is a member of Delhi chapter of Young
Presidents Organisation.
Senior management team has over a decade of experience each in contribution to

revenue growth in SaaS and hospitality and travel sectors. They have extensive go-
to market and product development experience. Given that senior management
team is located across three continents, RateGain benefits from teams across
multiple geographies including go-to market teams that are located near enterprise
and mid-market customers allowing it to maintain relationships with them.
Management Structure
Source: Company, PL
December 2, 2021 26
Board of Director profile
Name Designation Associated From Educational Qualifications Work Experience
He is an entrepreneur with
Bachelor’s degree of science in
experience of over 15 years and has
Chairman and Managing business from Indiana University,
Bhanu Chopra Since incorporation been actively involved in the day-to-
Director after which he began his career with
day running of the Company since
Deloitte in 1998.
incorporation
She is an entrepreneur with more

than eight years of experience in the
Post graduate diploma in family
Company and has been actively
business management from Narsee
Megha Chopra Executive Director Since incorporation involved in the day-to-day running of
Monjee Institute of Management
the Company. Prior to directorship in
Studies, Mumbai
the company she was associated with
HCL Infosystems Limited.
He is a venture capitalist. Previously,

Bachelor’s degree in computer he has been associated with LinkedIn
science from University of Texas, Corporation USA, Freshdesk
Nishant Non-Executive Nominee Austin, United States and a master’s Technologies Private Limited and
Kanuru Rao Director degree in business administration Sirion Labs Private Limited. Currently,
from Massachusetts Institute of he is a partner at Avataar Venture
Technology, Cambridge, USA Partners, which was founded by him
in 2019.
Bachelor’s degree in commerce from

Shri Narsee Monjee College of
Commerce and Economics,
Girish Paman
Independent Director 29-Jun-21 University of Bombay and is an
Vanvari
associate member of the Institute of
Charted
Accountants of India
Bachelor’s degree in commerce and

a bachelor’s degree in law from Member of Institute of Company
Chaudhary Charan Singh University, Secretaries of India and has an
Aditi Gupta Independent Director 15th July 2021
Meerut and a master’s degree in experience of over 10 years as a
commerce from Indira Gandhi company secretary.
National Open University.
Venture capitalist with an experience

of over 13 years in equity
investments. Previously, he has
Bachelor’s degree in science and a
served as an officer of the Indian
EC Rajakumar master’s degree in science and a
Independent Director 15th July 2021 Revenue Services and
Konduru master’s degree in philosophy from
as the regional director of SEBI.
Sri Venkateswara University, Tirupati.
Currently, he is the managing director
of Ascent Capital Advisors India
Private, which he founded in 2008.
Source: Company, PL
December 2, 2021 27
Other Key Management personnel

Name Designation Associated From Educational Qualifications Work Experience
Group Chief Executive Bachelor’s degree in science from Prior to joining RateGain, he served as
Harmeet Singh 17th October 2019
Officer California State University, Northridge the President - J2 Cloud Services
Bachelor’s degree in commerce from Prior to joining the company, he was

Utkal University, Bhubaneswar and is a associated with Dion Global Solutions
Tanmaya Das Chief Financial Officer 29th June 2021
member of the Institute of Chartered Limited, PricewaterhouseCoopers and
Accountants of India Avya Global Connect Limited
Prior to joining the Company, he was

the chief revenue officer of Taj Hotels
Bachelor’s degree in arts from and the vice president revenue of
University of Delhi and a master’s Starwood Capital Group. He has been
Chinmai Sharma President – Americas 1st October 2018 degree in business administration from named as one of the ‘Top 20
Institut De Management Hôtelier Extraordinary minds within Sales,
International Marketing and Technology’ by
Hospitality Sales and Marketing
Association International, Europe.
Prior to joining the company, he was

Master’s degree in business
General Manager of the senior vice president of accounts in
Mark E Skroch 30th March 2020 administration from JL Kellogg School
BCV Social Fusion92, Chicago and an associate
of Management, Chicago
partner at VSA Partners, Chicago
Bachelor’s degree in arts from He has over eight years of experience

University of Delhi and has completed in human resource management. Prior
Global Human
Sahil Sharma 22nd June 2016 an executive program in human to joining the company, he was the
Resources
resource management from Indian senior manager of human resources in
Institute of Management, Calcutta Indiamart Intramesh Limited.

Global Head
University of Delhi, a diploma in hotel Prior to joining the company, he was
Corporate
Yogeesh management & catering technology associated with Taj Hotels, The
Development 13th March 2015
Chandra from National Council for Hotel Spencer on Byron Hotel, New Zealand
(Mergers &
Management and Catering Technology, and Kingsgate Hotel, Parnell, Auckland
Acquisitions)
New Delhi
He attended West Hatch High School Prior to joining the company, he was
Chigwell and the City and Guilds of associated with Bishopsgate and Zinc
Senior Vice President
Mark Haywood 2nd April 2019 London Institute. He is also a supplier House and Ascott Limited. He has
- Sales
member of the Institute of Travel received the CEO Award for his
Management contribution to Travelclick.
He is a member of the Institute of

Company Secretaries of India and has
Company Secretary over five years of experience as a
University of Delhi and a bachelor’s
Sachin Verma and Compliance 29th June 2021 practising company secretary. Prior to
degree in law from Chaudhary Charan
Officer joining the company he was the
Singh University, Meerut.
company secretary in Fair Exports
(India) Private Limited
Source: Company, PL
December 2, 2021 28
Key Risks
Revenue dependent on hospitality and travel industry
RateGain substantially derives all of its revenues from worldwide travel and
hospitality industry. The ‘Travel and Hospitality industry’ is highly sensitive to
economic conditions and trends. COVID-19 led to overall industry slowdown, not
only due to health concerns but also due to underlying economic slowdown and job
losses.
High revenue concentration from top clients
Revenue contribution from top 10 customers was 40.8%/41.0%/36.9% during

FY19/20/21. The company targets to generate significant portion of revenue from
existing customers in the form of long-term arrangements, increasing scope of
contract terms and number of engagements of existing customers. Losing few of
these top clients may significantly impact financials of the company.
Company has contingent liabilities that have not been

provided in financial statements
As on FY21, company had contingent liabilities (Indirect Tax expenses) of Rs.

683.77 INR mn (27% of revenue and 37% of cash & short investments in FY21). If
a significant portion of these liabilities materialize, it could have an adverse effect
on RateGain’s financial performance.
Company may be subject to penalties for non-compliance

with certain provisions of Companies Act, 2013
Company had filed a compounding application to Ministry of Corporate Affairs, on

August 14, 2021 for non-compliance of Section 42 of provisions of the Companies
Act, 2013. It had allotted 160 Equity Shares, as partly paid-up shares, to certain
company executives on private placement basis on March 8, 2021. However, during
the process of offer and allotment of equity shares, it inadvertently contravened
afore-mentioned compliance requirements under the Companies Act, 2013 and
rules made thereunder. While RateGain has taken steps to rectify these non-
compliances, there can be no assurance that it will receive favourable order in the
compounding application and even after receiving favourable order, it may be
subject to penalties for such past non-compliances.
December 2, 2021 29
Financials
Key Ratios
Ratios FY19 FY20 FY21
Profitability Ratios
EBITDA margin 8.3% 7.2% 2.5%
PBT Margin 3.6% -4.5% -9.8%
Pre-exceptional Net Profit margin 4.2% 8.4% -11.4%
EBIT margin 0.6% -3.5% -11.9%
Growth
Revenue Growth 52.4% -37.1%
EBITDA Growth 31.9% -78.5%
Pre-exceptional PAT Growth 204.9% NA
Return Ratios
ROCE 0.8% -4.8%
ROE 23.9% -14.9%
ROIC -10.0% -18.5%
Operating Ratios
Cash & Cash equivalents / Total Assets 30.0% 17.4% 42.4%
DSO 87.08 70.13 96.04
OCF/EBITDA 1.86 NA
OCF/PAT 1.59 NA
FCF/PAT NA NA
EPS 1.2 (2.3) (3.0)

DPS - - -
BVPS 16.1 15.5 25.4
Source: Company, PL
December 2, 2021 30
Income Statement (Rs mn)

Y/e March FY19 FY20 FY21 5M FY22
Gross Revenue 2,616 3,987 2,508 1,253
YoY growth 52.4% -37.1%
Employee benefit expense (1,208) (2,058) (1,513) (759)

as a % of Gross Revenues 46.2% 51.6% 60.3% 60.6%
Other expenses (1,190) (1,642) (934) (449)

as a % of Gross Revenues 45.5% 41.2% 37.2% 35.8%
EBITDA 218 287 62 45

EBITDA margin 8.3% 7.2% 2.5% 3.6%
D&A (202) (427) (359) (130)

as a % of revenues 7.7% 10.7% 14.3% 10.3%
EBIT 15 (140) (297) (84)

EBIT margin 0.6% -3.5% -11.9% -6.7%
Other income 111 589 133 60

Implied Yield 76.1% 10.4%
Finance costs (32) (89) (82) (22)
Implied interest rate 9.8% 7.1%
Exceptional items - (537) - (47)
PBT 95 (178) (246) (94)

PBT Margin 3.6% -4.5% -9.8% -7.5%
Total tax expense 15 (23) (39) 10

Tax rate -16.3% -13.2% -16.0% -11.0%
Profit/Loss 110 (201) (286) (83)

PAT margin 4.2% -5.0% -11.4% -6.7%
Pre-exceptional Profit/Loss 110 336 (286) (36)

Pre-exceptional PAT margin 4.2% 8.4% -11.4% -2.9%
Source: Company, PL
December 2, 2021 31
Balance Sheet (Rs mn)

Total non-current Assets 1,174 2,264 1,725 1,595
Property, Plant & Equipment 171 131 79 57
Right-of-use asset 216 197 46 19
Intangible assets 674 1,831 1,554 1,453
Financial assets 66 55 8 8
Non-current tax assets (net) 45 48 38 57
Other non-current assets 2 1 1 2
Total current Assets 1,675 1,708 2,673 2,687

Cash and Cash equivalents 855 693 1,864 1,899
Cash and Bank Balance 396 210 538 551
Other Bank Balance 52 34 36 36
Investments 407 449 1,290 1,312
Trade Receivables 633 777 669 641
Loans 9 2 2 3
Other current Assets 178 236 138 144
Total Assets 2,849 3,971 4,398 4,282
Total non-current Liabilities 491 1,421 1,040 989

Borrowing 244 1,007 981 951
Lease liabilities 213 180 26 3
Long-term provisions 31 30 33 35
Other non-current liabilities 2 203 - -
Total current Liabilities 926 1,173 909 851

Lease liabilities 86 100 27 20
Short-term provisions 2 2 2 2
Trade payables 193 386 243 234
Other Current Liabilities 646 685 637 595
Total Liabilities 1,417 2,594 1,949 1,840
Equity 1,432 1,377 2,449 2,442

Equity Share capital 7 7 7 79
Instruments entirely equity in nature 1 1 1 1
Other equity 1,425 1,370 2,441 2,362
Total Equity and Liabilities 2,849 3,971 4,398 4,282

Source: Company, PL
December 2, 2021 32
Cash Flow (Rs mn)

Operating activities
Profit/(loss) before tax 95 (178) (246) (94)
Adjustments for:
Depreciation and amortization expense 202 427 359 130
Finance cost 31 89 81 21
Employee stock option expense 26 73 96 78
Trade and other receivables written off 23 47 74 11
Allowance for expected credit loss 36 37 20 33
Net gain on current investments measured at FVTPL (42) (27) (31) (22)
Interest income (8) (9) (7) (1)
Unrealized foreign exchange loss/(profit) (19) 28 (0) 2
Gain on termination of lease - - (54) (3)
Sundry balances written back (50) (3) (2) (7)
Write off of property, plant and equipment (net) 1 - 0 -
Impairment of goodwill - 537 - -
Gain on fair valuation of contingent consideration - (537) - -
Gain/loss on sale of property, plant and equipment (net) - (0) 0 0
Gain on disposal of investment in subsidiary (10) - - -
Loss on subleasing agreement 3 - - -
Operating profit before working capital changes and other adjustments 288 484 291 149
Working capital adjustments:
(Increase)/ Decrease in trade receivables (41) (97) 29 (18)
(Increase)/ Decrease in financial assets 40 3 67 4
(Increase)/ Decrease in loans (5) 8 0 (1)
(Increase)/ Decrease in other assets (1) (31) 34 (12)
Increase/ (Decrease) in trade payable (15) 121 (141) (1)
Increase/ (Decrease) in other financial liabilities 132 (39) 28 (18)
Increase/ (Decrease) in other liabilities (22) (186) (82) (28)
Increase/ (Decrease) provisions 12 (35) 3 2
Cash generated from operating activities post working capital 387 228 229 78
Income tax paid (25) (37) (23) (7)
Net cash generated from operating activities 362 191 206 70
Investing activities
Purchase of property, plant and equipment and intangible assets (20) (55) (7) (4)
Proceeds from sale of property, plant and equipment - 0 - 1
(Investments in) / sale of mutual funds (net) 754 (15) (810) -
Proceeds on maturity / (investments in) bank deposits (net) (15) 18 (2) (0)
Interest income 1 3 2 1
Investment in assets acquired from Dhisco Inc. and BCV Social LLC (753) (1,075) - -
Net cash generated from/(used in) investing activities (34) (1,123) (817) (3)
Financing activities
Proceeds from issue of equity instruments # - - -
Proceeds from issue of compulsorily convertible preference shares - - 1,111 -
Repayment of long-term borrowings - (11) (22) (23)
Repayment of lease liabilities (41) (68) (17) (8)
Proceeds from long-term borrowings - 868 - -
Share application money received/(paid) - - 0 (0)
Share issue expenses - - (74) -
Finance cost paid (23) (61) (69) (20)
Net cash generated from/(used in) financing activities (63) 728 929 (52)
Net increase/ (decrease) in cash and cash equivalents 265 (204) 318 16
Net foreign exchange difference 5 18 10 (3)
Cash and cash equivalents at the beginning of the year 126 396 210 538
Cash and cash equivalents at year end 396 210 538 551
Source: Company, PL
December 2, 2021 33
Analyst Coverage Universe

Sr. No. Company Name Rating TP (Rs) Share Price (Rs)
1 Affle (India) BUY 1,496 1,169
2 Coforge BUY 5,596 5,069
3 Cyient BUY 1,315 1,160
4 HCL Technologies BUY 1,386 1,251
5 Infosys BUY 2,004 1,709
6 L&T Technology Services BUY 5,621 5,132
7 Larsen & Toubro Infotech BUY 6,710 5,906
8 Mindtree BUY 4,804 4,364
9 Mphasis BUY 3,674 3,396
10 Persistent Systems BUY 4,641 4,060
11 Redington (India) BUY 213 145
12 Sonata Software BUY 994 918
13 Tata Consultancy Services BUY 4,113 3,936
14 TeamLease Services Reduce 4,259 4,668
15 Tech Mahindra BUY 1,862 1,522
16 Wipro BUY 736 651
17 Zensar Technologies BUY 539 453
PL’s Recommendation Nomenclature (Absolute Performance)

Buy : >15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly
December 2, 2021 34
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compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
(US Clients)
The research analysts, with respect to each issuer and its securities covered by them in this research report, certify that: All of the views expressed in this research report accurately
reflect his or her or their personal views about all of the issuers and their securities; and No part of his or her or their compensation was, is or will be directly related to the specific
recommendation or views expressed in this research report.
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IPO Note - Rategain - PL - 021221

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Rategain Travel Technologies Ltd.

Rating: Subscribe | Pirce Band: Rs 405-425

December 2, 2021 Leading global SaaS player in hospitality and

 Marquee client base to provide more cross selling opportunities:

About the Company

RateGain started in 2004 with a ‘competitive intelligence price comparison product’

Sharp decline in revenue in FY21 due to COVID led slowdown in

Revenue (Rs. Mn)

 Market Intelligence: RateGain provides access to pricing and availability

 Dynamic Pricing Recommendation: RateGain serves certain segments

 Distribution: Technology infrastructure platform helps hotel chains and

 RezGain: It is an AI enabled smart distribution channel manager that helps

 DHISCO: DHISCO Switch provides mission critical connectivity which

Utilization of net proceeds

RateGain’s inter-operable products integrated across a single platform not only

Industry challenges addressed by RateGain’s products

Innovative AI driven industry relevant SaaS solutions

Interoperable nature of products provides significant opportunity to cross-sell

RateGain’s bundled offerings

Globally diverse, marquee, long-standing clientele

High customer retention rates: Company’s AI enabled platform and technology

Active customers increased by 125 in 6MFY22

Reduction in client concentration risk

Channel Manager case study of a hotel management chain in Southeast Asia

Strong operational performance & successful track-

Company showed strong operating performance with adjusted EBITDA margins at

RateGain’s products are developed in-house through centralized group of software

Track record of successful strategic M&As: Strong balance sheet position

Similarly, it acquired BCV (MarTech), a marketing technology company in 2019 and

Recently, RateGain acquired Myhotelshop, a German company which offers

RateGain is unique in terms of 1) its specific breadth of supplier coverage, 2) its

In DaaS business, it competes with TravelClick, OTAinsight and Fornova in hotel

In Distribution business, DHISCO and RezGain compete with Siteminder,

Competitors in DaaS platform

Competitors in Distribution platform

Competitors in MarTech platform

RateGain has presence across revenue maximization value chain

Peer financials & valuations

 Land and expand: RateGain focusses on mining existing customers through

 Penetration: RateGain will continue to expand enterprise sales infrastructure

 Go-to-market at scale: RateGain will continue to build its network for

RateGain plans to expand into

Partnerships and alliances to be a key growth lever: RateGain intends to cost-

Expand MarTech solution: MarTech offers end-to-end social media management

 Reputation Management: As customers tend to rely more on other client’s

 Social Media influencer and engagement management: RateGain intends

 Expansion of Social Platforms: RateGain aims to expand its channel

Leverage unique data assets to create new AI product offerings: RateGain

According to Phocuswright and McKinsey survey of 899 C-Level executives

Global online travel market to grow at 24% CAGR over 21-24E

Total Travel Market

Key technology trends to shape travel demand

 Availability of multiple platforms for travel bookings, including OTAs,

 Automating revenue management systems: Revenue Management

 Use of analytics, business intelligence and data science to provide

Addressable market to grow at 18% CAGR over 2021-25

Addressable serviceable market size for RateGain is $4.34 bn in 2021, growing to

Serviceable addressable market (SAM) to grow at 18% CAGR to

Revenue decreased by 37.1% in FY21, primarily on account of impact of COVID-