udChalo is a consumer-tech startup that exclusively serves travel needs of India’s defence forces and their dependents. Ravi Kumar, son of a 1971-war-veteran, founded this startup in 2015 with a mission to ‘make life simpler for soldiers’. This startup has clocked US $110 million+ turnover last year – its sixth year – and is now looking for its first fundraise of US $100 million for expansion into new verticals like housing, ecommerce and financial services. On National Start-up Day celebrated recently, udChalo was awarded as the most innovative and socially impactful startup in the travel planning and discovery segment.
In the beginning…
Ravi Kumar is a native of Patna, born in Kolkata and stayed in Jhansi, Delhi, Bengaluru cities because of the Army family background. Son of a 1971 war veteran, Ravi did his Mechanical Engineering from Pune’s Army Institute of Technology (AIT) in 2009. Although Ravi was placed with the Tata AutoComp Systems (TACO) company, the joining came after a delay of nine months because of ‘The Great Recession’.
Says Ravi, “Since my first job was with a Tata company, we have built udChalo culturally the Tata way. Trust, good feeling is a part of culture. While working at Tata, I decided to get into teaching. I needed to have a PhD and for that I had to do Master’s degree first. So, I left the job at TACO and joined an engineering college in Mumbai. I taught there for seven months and then I cleared my Graduate Aptitude Test in Engineering (GATE) examination. I got a call from IIT Bombay and decided to join, but before I took admission, this idea of udChalo came to my mind.”
After engineering, Ravi Kumar also pursued one-year offline course from Stanford Graduate School of Business called the Stanford Seed.
Kingfisher debacle
Ravi Kumar’s idea of startup came at a time when the Kingfisher airlines debacle happened. When he analysed the reasons behind the airlines failure, Ravi Kumar realised that there are three primary reasons for such a failure – high taxes, high aviation fuel rates and low passenger-load factor.
Says Ravi Kumar, “While we can’t do much about high taxes or high aviation fuel rates, what we can address is the passenger-load factor. We were taken aback due to Kingfisher’s failure, but then we realised that we can actually convince other airlines of offering a completely new customer segment – the AC Tier 2 and Tier 3 passengers of railways who can be converted to airline passengers.”
But it was easier said than done. Ravi says, “In 2012 we started working on the idea. At any point of time in those days, around 48,000 seats (in all airlines together) were going vacant and on the other side, three lakh people in wait-lists were being rejected. So, clearly there was a mismatch. We met a lot of executives from various airlines. Everybody liked the idea; however, airline officials were sceptical about this customer segment. The officials believed that leisure and business travellers are their main customers and they never thought of any other class of customer.”
Network is networth
Ravi Kumar and his team had to do a lot of convincing from 2012 to 2015. Recalling his early struggle to ‘network’ with right set of people, Ravi says, “I was fresh graduate from college and had no ‘network’ then. We were facing a huge challenge of how to reach the airline executives just to tell them that this idea can really do wonders. We visited airline websites and noted down names of the persons concerned. We used to guess and randomly send emails using combination of domain and names. One fine day, one of the chief commercial officer of an airline responded to us and he called us to Mumbai. He liked the idea and introduced us to a few more people. That’s how we started building reputation with the airline industry. After three years of perseverance, udChalo managed to bag our first customer. It was Jet Airways who agreed to offer us discounted fares.”
“In the three years, we had also evolved. We told Jet Airways that we will bring only those passengers who are entitled to travel by railways. All the defence personnel (Army, Navy, Airforce and Paramilitary), except officers (who are 2 to 3 per cent of the entire force), was our target customer. We were the first to launch defence discount concept in aviation sector in the country,” he added.
Bengaluru first
When udChalo started with the defence market in 2015, they realised that leaves of defence personnel are approved at the last moment and hence they barely manage to get a confirmed railway ticket.
Recalls Ravi, “In September 2014, I had also thought of doing job. I had gone for an interview to SSB Bengaluru where I realised that candidates coming to SSB Bengaluru knew their arrival date and time, but departure was not fixed because a candidate could be rejected on the very first day or fifth day. So, nobody could book return tickets. That prompted me to start from Bengaluru first. I decided to start an offline booking office in Bengaluru.”
“We asked Jet Airways to provide tickets from Bengaluru to any other destination. We were offered tickets at about 50 per cent discounted rate by Jet Airways. If any candidate wanted a ticket from Bengaluru, he could get one to Delhi and Chandigarh. It was a win-win situation for both – the airlines and customers. Business started picking up from Bengaluru and then we decided to start pan-India services instead of restricting ourselves ‘from Bengaluru’ only,” said Ravi.
“After Jet airways, Go Air and other airlines came on board. In the first financial year we could book 1,600 flight tickets. Today we book about 20 lakh flight tickets annually,” Ravi Kumar proudly claims.
‘Sarhad Se Ghar Tak’
Changing the mindset of ‘faujis’ was also a challenge. Ravi Kumar said, “Most of the ‘faujis’ were shy about how to behave in the flight, what items they can carry in their luggage, what could be prohibited and screened, etc. To address all their concerns, we did offline presentations on a massive scale. Now we have our representatives in areas like Kargil, Baramulla, Kupwara and Uri. We have our own offices there.”
“Even today there many challenges to be resolved. For example, a flight won’t take any soldier directly to their native place like Satara, Solapur, etc. We had started a scheme called ‘Sarhad Se Ghar Tak’ to address this issue. In this scheme, for example, a soldier would travel from Srinagar airport to Pune airport and a car would pick-up passengers and drop them to Karad, Satara, Kolhapur, Sangli villages. We had tied up with some travel companies and it was doing very well, but due to coronavirus outbreak we had to stop it temporarily,” he said.
“If you look at the idea, the core value is to make life simpler for soldiers. Anything which makes life simpler for soldiers we do it,” adds Ravi.
Million dollar take off
In its second financial year of operations, udChalo sold two lakh tickets. It was recognised as the fastest growing MSME with a compound annual growth rate (CAGR) growth of 495 per cent for the period of 2015 to 2020.
When asked whether he expected such growth and what clicked with the customers, Ravi said, “Our model was well understood by the customers as they would reach home early by paying a bit of extra money as compared to railway fare. We would help them in documentation and claim settlement as the reimbursed railway-fare amount would get deposited in their bank accounts. We made our website more robust and spent some money on infrastructure. My co-founder Varun Jain, who used to run a travel technology company, helped me in making the app, website and infrastructure.”
“There were two advantages of offline booking offices. First is that we got closer to our customers and hence we could convince and explain them how to fill the documents and reimbursement form. Second advantage was that we got visibility in the Cantts (Cantonment areas). We also created employment opportunity for one ex-service person per office. Presently, we have 70 such offices and at each location, including Sub Area Canteen, BEG Center at Khadki in Pune, and other locations at Jammu and Kashmir and North East, one ex-service personnel or war widow or their dependents have been employed,” Ravi stated.
Diversifying
Says Ravi Kumar, “In April 2021, Samsung India joined hands with us. We have over 20 lakh members on our website and hence they asked us to offer their mobile phones to our members. It was a huge success and today we are selling mobiles worth ₹25 lakh and above every month. That’s why we thought, let’s not restrict ourselves to travel. We started exploring other verticals like housing, ecommerce, financial services. There is an initiative like Army Welfare Housing Organisation (AWHO) but it is not available in all cities. Recently, we tied up with a Pune-based developer and within two months we sold 26 units. We will tie-up with one developer and builder in every city. We will give them exclusive customers in return of exclusive rates for us.”
Financial services
udChalo holds ERI License from department of income tax. “We have pivoted ourselves, after we realised that we can do many things. This year we have filed income tax of more than 2,000 members and next year we are aiming to file IT for all personnel of armed forces. With this information, we can also offer instant low-interest loans to our members. At present, many soldiers end up paying high interest rates to their village money-lenders. Banks ask for heavy documentation. We will offer the ‘faujis’ best interest rates in the slab of 12 to 13 per cent as against 18 per cent of other NBFCs,” says Ravi Kumar.
“When we pivoted from a travel to a consumer-tech company, we wanted to leverage the consumer base using technology. We had two options – build an internal team of data analysts and infrastructure or to acquire a data analytics company. We got to know about Dimentrix company which was already into data analytics domain. With its acquisition, we fastened the process of our entire consumer-technology part to push more products,” he added.
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