redBus' founders to move out as Naspers set to acquire ticketing site for around $140M
South African Internet and media giant Naspers is set to acquire Pilani Soft Labs Pvt Ltd which runs the country's top bus ticketing site redBus, giving one of the rare multi-bagger exits to its venture capital investors.
The news was first reported by The Times of India which said the seven-year-old firm is likely to be acquired for around $100 million or around 10x its net revenues for FY13.
Though the deal has not been announced and there is no official word on it yet, sources close to the development said the transaction is valued around $140 million which would mean revenue multiple of around 14x to its FY13 top-line. redBus had clocked a marginal profit in FY12 as per data collated by VCCEdge, the data research platform of VCCircle.
Founders of redBus are looking to exit the startup completely post the acquisition, one source told Techcircle.in.
After the acquisition, redBus will be integrated with the Indian arm of Naspers, the Ibibo group. Naspers also holds majority stake in one of the biggest e-com players in India, Flipkart.
Mahesh Murthy of Seedfund, one of the early investors in redBus, declined to comment on the development. An email query sent to Phanindra Sama, co-founder and CEO of redBus, also did not elicit any response. Other investors in redBus include Inventus Capital Partners and Helion Venture Partners.
redBus was founded by Sama along with Charan Padmaraju and Sudhakar Pasupunuri in 2006. In 2007, the company raised $1 million in funding from Seedfund, which was followed by an undisclosed second round from Inventus Capital Partners and Seedfund in July 2009. In May 2011, it raised $6.5 million from Helion Venture Partners, Inventus Capital Partners and Seedfund in its Series C funding.
It went on to become one of the biggest Internet companies in India, selling Rs 300 crore worth bus tickets in FY 2012 alone. It has a team of around 400 employees.
What will happen to APIs?
One rumour doing the rounds is that redBus' APIs will be closed for other players post acquisition. This would essentially mean its inventory may not be available to other OTAs as it is now, making it a Naspers only property. This could also strengthen Naspers existing OTA Goibibo which may the sole partner for sharing inventory while maintaining redBus site in the immediate future.
This could put a question mark over redBus' existing arrangement with Expedia. Last August, the two firms struck a deal where redBus powered bus ticket booking functionality on expedia.co.in, while Expedia got an access to seat inventory across more than 180,000 bus services of 900 operators across the country. Earlier redBus had partnered with Via, Gobibo and Ezeego in smaller tie-ups.
Previously, redBus had discontinued its deal with MakeMyTrip after the OTA acquired Ticketwala, which was doing similar business.
Naspers snapping redBus could be a big loss for top OTAs such as MakeMyTrip, Yatra and Cleartrip which was also looking at the bus ticketing business closely.
(Edited by Joby Puthuparampil Johnson)