Mobility company Chalo has raised about $40 million in a Series C funding round led by Lightrock India and Filter Capital.
The round also saw participation from existing investors WaterBridge Ventures, Raine Venture Partners, Neeraj Arora (former Chief Business Officer, WhatsApp) and Amit Singhal (former SVP, Google). The Raine Group was the exclusive advisor for this transaction.
With this fundraise, Chalo aims to invest in technology, deepen its presence in India, and expand to international cities. Further, $10 million of the proceeds will be used to buy back ESOPs to reward current and former employees, as well as to enable early angel investors to monetise.
Digital bus operations
The Chalo App enables passengers to live track their bus and see its arrival in real-time, thereby eliminating waiting time at bus stops. They can also see how crowded the bus is and buy a ticket or a bus pass via the app. Chalo has a card which enables digital bus tickets for those who are not comfortable using their smartphones for payments. With its tap-to-pay experience, the Chalo Card eliminates cash exchange in the bus.
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For bus operators, Chalo has built a complete tech stack to digitise bus operations and offer a technology-led digital bus experience. Chalo deploys GPS devices for live tracking as well as electronic ticketing devices that enable mobile and card payments in buses. Bus operators benefit with increased ridership. By converting cash tickets into digital transactions via the Chalo App and Chalo Card, revenue leakage and cash management burden on their daily operations is also reduced.
Large market potential
Chalo claims to have powered 20 million bus rides in September 2021. Targeting the public transport segment with the largest addressable market in the mobility segment, Chalo has established a market leadership with 15,000 buses live on its platform and a presence in 31 cities across Karnataka, Kerala, Madhya Pradesh, Bihar, Assam, Tamil Nadu, Uttar Pradesh, and other States.
Mohit Dubey, CEO, Chalo, said, “Buses are India’s #1 form of public transport with 48 per cent share of trips. Despite this, the experience is broken. At Chalo, we deploy technology that significantly improves the bus experience, and thereby increases ridership.”
Nitin Nayar, Co-Founder and Managing Partner, Filter Capital India Advisors LLP, commented, “The Chalo founders are seasoned entrepreneurs tackling a large market opportunity; their technology platform has robust product-market fit, attractive network effects, and a dominant leadership position; and their business has a clear path to scale and long-term value creation.”
Under-served segment
Vaidhehi Ravindran, Partner, Lightrock, said, “Chalo has emerged as a clear winner post Covid by addressing the under-served public transport segment. This positions them to be the de-facto mobility operating system of the country. Public transport is the backbone to build a larger mobility platform addressing mobility needs at scale. We are impressed by the founding team’s innovative, technology led approach combined with a deep sense of purpose to serve the society. Their empathy towards stakeholders codified into the business at every level makes them the right team to build this solution for the Indian public.”
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Manish Kheterpal, Partner, WaterBridge Ventures, said, “Bus mobility in India is a $35 billion market opportunity. Unfortunately, it has not seen any tech disruption or meaningful service improvements. Chalo offers a full-stack solution for passengers, fragmented private bus operators and municipalities to improve this essential citizen service for over 350 million Indians. Chalo’s unique solution is positively impacting the lives of daily commuters across 11 States of India and is poised to expand its offering nationwide.”