Rejecting the conventional asset-heavy model, the travel aggregator thrives on commission-based operations, a move that ensured profitability from the start of operations, Raaghav Belavadi told Mint. The co-founder underscores the rarity and prudence of this approach in a business landscape often dominated by cautious financial manoeuvres.
“We work on commission and that is good enough to keep us highly profitable from day one. And I am saying this because nowadays ‘profitable’ is a word that is very sparingly and scarily used. But when you’re using your own money you will try to focus more on profitability,” he said.
The genesis of Hype can be traced to the co-founder’s globetrotting corporate life, spent in Switzerland. A combination of a personal affinity for luxury cars and a serendipitous incident gave rise to the idea of an app-driven service.
The incident was their parents’ 50th wedding anniversary that the siblings wanted to celebrate in a special way. They planned a lunch at a seven-star hotel and booked a Rolls Royce for their parents. Everyone was waiting in their silk sarees and suits. “The Rolls Royce didn’t show up as some politician wanted it. So, the agency cancelled our booking and didn’t even bother to tell me,” he said.
The app, launched in 2017, defied expectations, raking in ₹34 lakh revenue in the first month. Presently, Hype has a presence in 23 cities worldwide, with a strong base in India, the UK, and the UAE.
While luxury cars remain the linchpin of Hype’s revenue, the company has strategically ventured into yacht and private jet rentals, operating in multiple countries. The elite clientele spans corporate executives, top CEOs, and affluent individuals, with a subscription model offering a Privé membership at ₹25 lakh per year.
“We have a Privé membership, which is by invite only. We have over a dozen members. The crieteria is for them to spend between ₹50-80 lakh annually,” he added. “They get first access to ultra-premium cars, private clubs and more.”
Unfazed by challenges from the pandemic, geopolitical upheavals, and global economic downturns, Hype’s year-on-year growth remains robust. “We have grown 30-40% year-on-year. Today, we have 14,000 cars in India, and globally, 34,000 plus. We have 400 listed vendors, more than 1,400 individual entrepreneurs. The aggregated asset value globally will be more than $5.2 billion in luxury cars, $630 billion in private jets (20,000) and another $4.2 billion in yachts (1,800).”
He added that the company is one of the most expensive service providers in the segment.
“What Uber makes in profit from say 1,000 cars, we make from one car. We don’t have to break our heads with 10,000 customers every day. Even if we get 10 customers every day, they are going to pay the bills for the rest of the month. Our highest revenue comes even today from cars. But what we make with 100 cars we make in one private jet. What we make with probably 20-30 private jets we make in one yacht. One yacht for a week could be about $150,000 and also normally higher margin,” he explained.
Looking to the future, Hype is on the hunt for funding to facilitate its ambitious foray into the US market. The company aims to secure ₹50 crore in funding while maintaining control and vision firmly in the hands of the founders. Talks with family offices and luxury brands like Louis Vuitton are in progress to forge strategic partnerships.
“Between me and my sister, we own 91% of the company, and we would like to retain the power in the boardroom to control our vision. The biggest fear is always that you lose focus of the vision,” Belavadi added. Recently, actor Suniel Shetty invested an undisclosed amount in the company.
Hype’s narrative is punctuated by profitability. Belavadi claims that out of the three profitable startups—Zerodha, Zoho and Hype—his company is “by far bigger in profitability than Zerodha and Zoho combined.”
He, however, declined to share the financial details of the company.
The company, he claims, has a global customer database of 2.6 million.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates & Live Business News.
Published: 11 Mar 2024, 04:37 PM IST