 "Sudhakar Reddy Chirra")
AbhiBus, an online ticketing platform, plans to raise $10 million from private equity (PE) players. The company has appointed Kotak Investment Banking as advisor.
Sudhakar Reddy Chirra, founder and chief executive officer, said this would be part of the company's plan to raise a total of $40 million over the next two years from PE funds and strategic investors.
"The $10 million will be the first tranche and we hope to close the deal in the next three or four months," said Chirra. He refused to name the PE funds involved.
Hyderabad-based AbhiBus Services (India) offers information technology (IT) solutions and services to the bus travel sector. Founded in 2007, AbhiBus works with fleet owners to provide end-to-end solutions including online passenger reservation systems, e-ticketing system, fleet management solutions, vehicle tracking systems, passenger information systems, and logistics management, backed up by a 24x7 customer support centre.
The company is also the IT partner for the state transport corporations as well as private bus fleet operators. Andhra Pradesh State Road Transport Corporation uses its online passenger reservation system and its vehicle tracking system has been deployed on Rajasthan State Road Transport Corporation buses.
The proposed fund raising plan is to support the company's geographical expansion and to build a brand. The company plans to enter Gujarat, Maharashtra, Delhi, and Uttar Pradesh markets and this would support its target of becoming a Rs 500-crore company by FY16. AbhiBus clocked Rs 160 crore in FY14, and has set a target to close the financial year with a revenue of Rs 250 crore in FY15.
According to Chirra, bus ticketing is a Rs 25,000-crore industry with the southern India region contributing as much as 60-70 per cent. Of the Rs 25,000-crore, e-ticketing contributes only 15 per cent at the moment. This is expected to increase to 40 per cent in the next two years.
Apart from its own network, the inventory is distributed through indirect online channels such as MakeyMyTrip, and Travel Yaari.
If the company is successful in closing the deal, it will join the league of other online bus tickets booking companies that managed to attract investors. In 2013, redBus was sold to Naspers for $100 million. Last year, Ticketgoose raised Rs 24 crore in its second round of funding.
