Bangalore-based Pilani Soft Labs, owner of Redbus, the website that offers bus ticket bookings and distributions, has closed its second round of funding from Inventus Capital Partners, Seed Fund and other unnamed investors. Phanindra Sama, Co-Founder and CEO of RedBus told MediaNama that the company has increased its share capital to accommodate new investors, and the majority stake is still owned by the founders, though he declined to share the total amount, or any financial information.
In the second round, Seed Fund had invested $700,000 in RedBus, while unnamed investors had also contributed to a fundraising of $2.5 Million, mentioned in an interview here. That second round of investment has now been closed with an additional, undisclosed round of investment from Inventus Capital. The funds raised will be used to add more services, expand geographically and diversify.
Set up in 2006, RedBus had raised $1 million in its first round of funding of which $500,000 was from Indian VC Seed Fund and the rest from unnamed investors. The company has spent $1 million, Sama said.
Expansion Plans, Buses For Hire, SaaS
RedBus has over 500 partnerships with bus and tour operators for 5000 routes. It covers 15 states primarily in South, West and North India. It is now going to expand to Central, North-East and East India. It is also launching more packages. It will also launch chartered bus services soon on its site. After successfully piloting it, the company is now in the process of establishing internal processes and gearing up for the launch next month. “Between August and January, the foreign independent market will pick up and we hope to cash in on it,” says Sama.
They have also built a Software as a Service product for bus operators and will be launching it in the next two months. SaaS makes it easier for users to adopt technology as the SaaS provider handles licensing, upgrades and maintainence of the software. With this launch, RedBus is diversifying into software and is no longer just a “travel company”.
Redbus’ business model is to bring the entire ticket booking process online, just as Makemytrip or Yatra did with airlines or IRCTC did with trains. It has 75,000 partner outlets and offers ticket booking services from the mobile via SMS and phone. It also delivers the tickets home. It is mentored by TiE, and now has Parag Dhol from Inventus on its board to guide it in its expansion stage. Dhol said RedBus earns gross revenues of Rs 30 crore annually.
The website, founded by ex-BITS Pilani graduates, has grown since over the past year but is now in its most challenging year: other websites in this space include TicketVala, CustomerNeedz (which promises it will take 30 seconds to book the tickets), Ticketkaran (which offers a frequent traveller program), Yatra Bus, BusTicketVala and Ixigo Bus (2800 routes). TicketVala raised $2 million from FootPrint Ventures in 2007.