Ending speculation from last week, Bangalore-based bus ticketing company redBus has announced its acquisition by Ibibo Group (MIH India), a subsidiary of South African Internet and media conglomerate Naspers. The details of the transaction have not been disclosed. Several media reports have speculated on the deal size being anywhere between $100 million and $140 million.
Contrary to earlier reports, redBus founder and CEO Phanindra Sama will not be exiting the business and will continue in his current role, along with the other two founders.
Ibibo Group CEO and founder Ashish Kashyap told TechCrunch (which reported the deal first) that redBus will run independently and operate as a separate business. In a press release from IbiboGroup available on the TechCrunch site, the company says:
The combined volumes of redBus.in and ibiboGroup’s existing travel assets makes the group, one of the biggest online travel players in India.
All the travel entities of ibiboGroup (MIH India), including redBus.in, will continue to run independently and operate as separate businesses to drive deep focus. The founders and management teams of each of these entities will continue to build out their businesses.
Pilani Soft Labs, the company the owns redBus, was founded in 2006 by BITS Pilani alumni Sama, Sudhakar Pasupunuri and Charan Padmaraju. The company’s online, mobile and offline platforms aggregate 228,000 bus seats per day and sell more than a million tickets a month. It earns commission revenues on successful ticket sales. The company currently employs more than 600 people.
Speaking to Hindu Business Line on the acquisition, Sama said that the deal was inevitable because the company had to create an exit for its venture capital investors. He also said that the Naspers offer was chosen over seven other funding offers from private equity investors. On the topic of a potential public listing he said:
“The other option, of raising funds through an IPO, was also considered, but this deal was much more attractive.”
RedBus raised $1 million from Seedfund in 2008 in a Series A round and followed with an undisclosed amount in a Series B round led by Inventus Capital in 2009. In 2011, it raised a $6.5 million Series C round led by Helion Venture Partners.
The IbiboGroup consists of four businesses, apart from redBus — online travel site Goibibo.com, online marketplace Tradus.com, online payments platform PayU.in and auto classifieds site Gaadi.com.
Read our earlier posts on the redBus acquisition: