|Busbud refuels its bus travel booking platform with $11M
Montreal-based travel booking platform Busbud has closed an $11M Series B round led by iNovia Capital. New investors backing the company include Teralys, Claridge and Plaza Ventures. Existing investor Real Ventures also participated in the round.
As its name suggests, Busbud's platform is focused on intercity bus and coach travel. But it's also inked partnerships with some of the multi-modal travel booking platforms which are also aiming to simplify travel planning and ticket buying online, as a route to expand its reach.
Busbud says its website has about 3 million unique monthly visitors from 100+ countries at this point. It also offers ticket booking via its Android and iOS apps. On the bus travel supplier side, it says it has more than 1,300 partner operators in its marketplace.
Erik Blachford, former CEO of Expedia, and Philippe Vimard, former CTO/COO of publicly-listed eDreams/ODIGEO Travel Group (and currently CTO of doctor booking platform Doctolib) are also joining as new investors for the Series B - and joining its board of directors, along with Magaly Charbonneau, principal at iNovia.
"The global market for intercity bus travel is huge, with more passengers than air travel, yet it's a market that has been widely overlooked by the travel industry. That's what makes Busbud such an exciting investment opportunity," said Blachford, commenting in a supporting statement.
It's been some three and half years since the team last raised external funding. The size of Busbud's $9M Series A, back in July 2014, coupled with platform efficiencies have seen it through until now, according to founders Frederic Thouin, LP Maurice and Michael Gradek.
They say the new financing will go towards scaling the business, growing the team (especially on the engineering and product dev side) and for further fueling international expansion by adding more countries and destinations - notably in Asia.
"We're an online travel agent and our business model allows us to be very efficient given the technology platform we've built on top of direct booking connectivity to thousands of bus operators worldwide," they tell TechCrunch, discussing the gap between the Series A and B, and confirming their 2011-founded business is profitable.
"Also, being based in Canada, we've been able to be very efficient on the cost side (office rent, talent, etc). We've balanced our budget well and generated strong growth to keep extending our runway. Busbud is making money and we're in growth mode, with a strong potential for even faster growth with this new funding round."
Busbud says its best markets for selling tickets are currently in North America and Europe. "We've also increasingly performed very well in Latin America. Our more recent expansion markets are Southeast Asia and South Africa, where we are partnering with local bus companies to offer our easy bus booking for international travellers," they add.
In terms of travellers who buy the most tickets via its platform, it's still Americans, Canadians, British and Spanish tourists making the running. Though Busbud says it's seeing "a lot more diversity" in its userbase as it's expanded to serve more destinations worldwide.
Close to 90 per cent of the bus routes offered on Busbud are now bookable directly via its site and apps (vs searches being redirected to bus operator partners' websites to complete a booking) - suggesting a successful transition from being a mixed search and booking marketplace, in its earlier years, to largely capturing all booking revenue now.
"We believe direct booking is a key differentiator for our users, as travellers can complete their booking with a fast and secure checkout in 11 languages and 30+ currencies," the founders add.
In recent years, VC money has poured into travel booking platforms - such as pan-European train booking platform GoEuro, which has raised close to $150M to date, from big name backers such as Goldman Sachs and Kleiner Perkins Caufield & Byers (in recent years it's also been looking east to power business growth). Meanwhile, KKR-owned Trainline shelled out as much as $189M to acquire the French rail platform, Captain Train, in 2016.
With so much money sloshing around the travel booking space there's competitive pressure on platforms to keep investing in the core product.
But also - for a bus travel specialist like Busbud - opportunities to grow via partnerships with other well-resourced players that have a different or multi-modal transport focus.
Multi-modal travel platform players with whom Busbud says it's "selectively" partnering at this point - supplying bus inventory and booking - include Trainline, Rome2Rio, CheckmyBus and Liligo.fr.
The company's investors may well also be spying the potential for an exit, down the road, to a larger booking entity flush with institutional cash and a strategic desire to swoop up a large number of bus travel supplier relationships.
Though Busbud is also facing competition from another direction, from the likes of Distribusion: A b2b startup that offers an API which can plug bus booking directly into travel search engines and websites.
In 2015, it launched a similar b2b play - called Busbud Business - offering a real-time API and white label program to partners wanting to connect and integrate its bus inventory.
Enhancing its API is on its product to-do list now that it's refueled via the Series B. Other areas it says it's planning to focus on include adding more operators and building out interconnection (to be able to combine two legs from different bus operators).
It also intends to work on improving the mobile experience, location mapping, user travel reviews, bus amenity info, and adding more payment options. Other features it wants to work on include real time bus tracking, better itinerary info and travel tips.