redBus

But then he decided that he won’t be running here and there for bus tickets and won’t let others do the same.

This was the thought behind ‘redBus’, an online bus ticket booking portal.

He told his friends about this idea & all the three quit their ‘secured’ I.T. jobs and started ‘redBus.in.

Initially, it was difficult for redBus founders to convince the bus operators who were used to deal with their traditional brick-and-mortar travel agents. The first bus operator was not ready to give them more than five seats to sell. The first ticket was sold on 22^nd August 2006 which was bought by a lady from Infosys for ‘Tirupati’. This was the start of long & proud journey of redBus.in

Although it took several months to convince bus operators & word-of-mouth publicity; Increasing internet penetration, online train & airplane booking were the two main factors which acted as catalysts for the online bus ticket booking portal idea.

Moving Ahead:

redBus started in 2006 with a capital of Rs. 500,000.

During first financial year redBus did business worth Rs. 5 million.

Year 2008 was a huge success. Turnover was Rs. 50 million; tie ups with 50 bus operators & total employee strength of 25-30 people.

In year 2009, turnover was Rs. 300 million.

In 2010, turnover reached to Rs. 600 million.

During start of 2012, redBus announced a tie up with ‘Goa State Road Transport’ which will help it to offer more tickets to its customers.

In July 2012, redBus has announced a tie up with ‘Rajasthan State Road Transport Corporation’ (RSRTC) which will enable redBus to sell RSRTC bus tickets.

redBus is focusing on many aspects of the business. It is expanding in various parts of India, launching new packages, launching charted bus services, improving internal processes. Booking return tickets was a challenge with private bus operators but by building a network of several bus operators, redBus enabled the travelers to book return tickets. Features like seat selection & standardized fares became very popular.

Revenue:

redBus generates its revenue by charging commission to the bus operators. The other major source of revenue is the software solutions sold to the bus operators & travel agents. One of such software is ‘BOSS’ (Bus Operator Software Services) which helps them to get real time information about the seat status.

Marketing:

After securing funding from seed funds & VCs, redBus used typical ways of marketing but it is interesting to know how the redBus.in was advertized during initial days. The founders used to go to the I.T. companies, stand outside and distribute redBus cards to the employees when they used to come out for lunch. They even requested their friends working in other I.T. companies to upload information about redBus on their internal forums.

Funding:

redBus raised $ 1 million during its first round of fund raising in 2007 where Seedfund Advisors which is an early stage investor invested $ 500,000 & rest of the amount was invested by unnamed investors.

It had its second round of fund raising in 2009 from Inventus Capital Partners, seedFund & other unnamed investors. seedFund invested $ 700,000 while unnamed investors invested $ 2.5 Million. In May 2011, redBus had third round of funding where it raised $6.5 million by Helion Venture and by the existing investors, Seedfund and Inventus Capital Partners.

Achievement so far:

redBus has sold 10 million seats. It has 2 million registered users. In last 5 years, the company’s average growth is 250%. It offers tickets for over 1.8 lakh bus routes across India & has got association with over 700 operators. redBus employee strength has reached up to 400 with 18 offices spread across India. redBus ticket can be booked at over 75000 outlets across India.

TiE (The Indus Entrepreneurs) Bengaluru, has played a major role in fostering redBus. TiE guided redBus founders at all levels of business development. It has been seen that many promising startups fail because they do not get right advice from industry experts at right time. Organizations like TiE are playing an important role in fostering the Indian Entrepreneurship. There is a need of many such organizations in India & other developing countries.

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