For Phanindra Sama, one of the three founders of online ticketing company RedBus, this is one bus he did not miss.
Founded in 2006, after he missed an outstation bus, he started the company with Sudhakar Pasupunuri and Charan Padmaraju, who have been together from their BITS Pilani days.
Since then, the company has managed to get a 65 per cent market share in bus ticketing and has sold one crore tickets till last year, according to company sources. Further, the company helps bus operators in selling 228,000 seats, around a million tickets in a month and has tie-ups with both private and government bus operators across the country.
The objective was good news for both travellers and bus operators. For bus operators, it increases their chances of managing their seats inventory better, sell more tickets, plan new routes and offer new services that could be key differentiators, say industry watchers. Despite all this, the largely unorganised travel industry saw things a bit differently. In a thin-margin market, bus operators decided to put up their own IT infrastructure. Also, with cloud computing technologies, investments by bus operators are lesser than what were needed and they are selling tickets through their Web sites at discounted rates. This, in turn, is eating into the margins, Sama admits.
If the deal comes through, Naresh Bhat, founder of Vidadmetrix, says that it would be a much needed boost to the Indian start-up ecosystem, which has seen few exits in the last few years.
Deal changes nothing, says CEO
For Phanindra Sama, the CEO of RedBus, nothing would change in terms of the way RedBus is run and he will continue to be the CEO, after Naspers said that it will acquire the company.
“This deal changes nothing and we will continue to remain independent and Naspers will not control us,” he said.
Talking about the deal, he further added that it was an offer for venture capitalists in the company to exit the business.
The company has VC investments of Rs 43 crore, out of which Rs 30 crore was raised last year from Helion and Seedfund. Helion did not want to comment on this and an e-mail sent to Mahesh Murthy of Seedfund did not elicit a response.
Sama added there were offers from about half-a-dozen other investors and the Board decided that this was the best one.