AbhiBus.com to raise Rs 57 cr in PE funding
Jun 16 2013 , Mumbai
“We are a break-even company and so far, we have been funding our expansions internally. However, we are in talks with private equity companies to fund our future expansion plans,” Sudhakar Reddy Chirra, founder and CEO, AbhiBus.com, told Financial Chronicle. He also said that the deal is likely to happen within the next three months and hinted on being in discussion with both domestic and foreign equity players.
“The PE funds will value the company according to the present market valuation and will thereafter decide on the proportion of the stake sale. So, I cannot comment on it now.” FC, however, could not verify the claim of the promoter independently.
The company plans to use the funds towards adding more inventories and also on promotion and branding.
The long distance bus ticketing industry, including both state transport companies and private operators, is around Rs 40,000 crore annually, of which private operators controls nearly Rs 15,000 crore annually. Of the Rs 15,000 crore segment, the online long distance bus ticket booking platform is around 10 per cent while the rest is controlled through cash sales or agents.
Also an aggregator of bus tickets inventory across the country, it has an inventory of 12,000 buses. This year, the company plans to add 3,000 more to its existing inventory. AbhiBus also has tie-ups with 1,000 bus operators and offer online solutions to 110 operators and five state transport corporations. Apart from ticket booking, it also provides end-to-end transport solutions for bus fleet owners, vehicle tracking companies and e-ticketing systems for the online travel agencies, such as Make My Trip, Cleartrip, Goibibo and Yatra.
It also offers technology support to state transport corporations of Rajasthan, Uttar Pradesh, Karnataka, Andhra Pradesh and Tamil Nadu. Reddy said this industry is predominantly in the western and southern India with Andhra Pradesh, Tamil Nadu, Gujarat, Maharashtra, Kerala and Karnataka together accounting for 70 per cent of penetration.
About expanding in the northern and eastern India, Reddy said, “In north, commercial bus services are not so common…its more intended towards attracting tourists and in the east, the region is well connected by railways.”
There are only two other players in the market in this category — RedBus.in and Travelyaari.com. Last year, Travelyaari was said to mull venture capital way to raise funds worth $10 million. It is said the company is still in a discussion mode. According to industry insiders, Redbus is also in talks with South Africa-based Nasper who is likely to acquire a controlling stake in the former for a valuation of $100 million. RedBus.com dominates the online bus ticketing platform and had earlier raised nearly $9.7 million of funds through VC funding.
In 2012-13, AbhiBus has clocked revenue of Rs 150 crore and is expecting to garner Rs 350 crore in 2013-14 and around Rs 700 crore in 2014-15.