Bangalore-based online bus ticketing portal redBus.in announced on Friday its acquisition by the ibiboGroup, a subsidiary of Naspers, a South African company with interests in the Internet and the media. Neither party disclosed the value of the deal, which has been a subject of speculation in the last few weeks.
redBus.in, promoted by Pilani Soft Labs Pvt. Ltd., a venture by three BITS Pilani students in 2006, claims that it is the biggest portal for online bus ticketing in terms of sales, transaction volumes and ticket inventories.
Phanindra Sama, redBus.in CEO, told The Hindu that the deal was “inevitable” because the venture capital-funded company had to “offer an exit to the funders.”
The company has received Rs.43 crore of funding from venture capitalists, of which the last tranche was for Rs.30 crore, raised eight months ago.
“The other option, of raising funds through an IPO (initial public offering) was also considered, but this deal was much more attractive,” Mr. Sama said. There were seven other offers of funding from private equity funds, but the offer by Naspers’ Indian subsidiary ibiboGroup, which, incidentally also sells bus tickets online, “was adjudged the best by the board,” Mr. Sama said. “This is not a merger,” he asserted.
Mr. Sama said, “This deal changes nothing for us. We will continue to remain independent.” Asked if redBus.in’s future was at stake, since Goibibo.com, which is owned by the ibiboGroup, also sells tickets online, he said: “Nothing will change. Goibibo.com as well as MakeMyTrip and Expedia will all continue to run on our ticketing platform.” He said Naspers, which owns many Internet companies, would not be interested in “controlling” redbus.in. “It is like Warren Buffet buying into Coca Cola, not for controlling the company but to reap benefits from growth.”
The company aggregated 228,000 seats a day, sold on average more than a million tickets a month and had more than 600 employees. Its main source of revenue was commissions earned from successful transactions, Mr. Sama said.
Transaction volumes on redbus.in amounted to Rs.600 crore in 2012-13, compared to Rs.350 crore in 2011-12. “We will continue to grow at this rate,” said Mr. Sama, who would continue as the CEO of the company.
Ashish Kashyap, CEO, ibiboGroup, said, unlike air travel, where 28 per cent of all tickets were sold online, in the case of bus tickets, only 5.7 per cent of tickets were sold online.