We had 8 term sheets from VCs when ibiboGroup approached us: Phanindra Sama of redBus.in
redBus.in, founded in 2006, has scripted one of the big success stories for not just the new technology ecosystem but also for venture capital investors, who have struggled to score big exits despite pouring in millions in the consumer Internet space. Started by the trio Phanindra Sama, Charan Padmaraju and Sudhakar Pasupunuri, it had raised three rounds of funding so far from Seedfund, Inventus Capital Partners and Helion Venture Partners. The firm grew its net revenues (actual revenues from commission as against gross revenue booked from sale of tickets) from Rs 43 lakh in FY08 to Rs 32.8 crore for the year ended March 31, 2012. Techcirle.in talked to Sama, co-founder and CEO, redBus.in, to get some quick insights into what the deal means for the firm and plans going forth. Edited excerpts:
One view in the tech startup ecosystem is that you pressed the exit button a bit early. How do you respond to that?
ibiboGroup approached us with a good, concrete deal and we liked the deal from various perspectives. First, we are being able to retain our independence; the quality of people at ibiboGroup is also very impressive. From the investors' perspective, they got a great exit, considering exits are quite rare these days.
Were you in the market to sell? Had you mandated this kind of a move?
No, absolutely not. Actually, we were looking to raise funds and we had immense investor interest. We had about eight term sheets from different funds and in fact we were almost about to sign with one of the VC/PE funds when ibiboGroup approached us. And this deal moved very quickly.
Will redBus be integrated with Goibibo?
redBus.in will continue to be what it is. That is the beauty of the ibiboGroup; they let us remain an independent entity. This is not a merger where we have been acquired to merge into Goibibo. This is an acquisition where we will retain our independence.
What will happen to redBus' APIs? Will they remain open?
We are not shutting our APIs. We will continue to power the other OTAs we currently support. We have partnerships with MakeMyTrip and Expedia and they will remain intact.
Will you remain in the company? What will be your role?
Yes, of course. We will continue to build redBus. I will remain as CEO of redBus and the whole management team and other teams will remain as they are. I am not going anywhere. I am not going to pursue some other (entrepreneurial) idea. I will remain a part of redBus and keep building it.
Are all existing redBus investors exiting in this deal?
Yes. New stock option plans will be in place now. It's a happy event for all stakeholders involved with redBus' journey.
What is next for redBus?
There is a lot to be done in India. There are many more road transport corporations that have just begun to appreciate what we do and have started to integrate with us. Their technological capabilities are a bit low; so we will work towards enhancing their technological capacity which will again increase availability of their inventory. We will continue what we have been doing all these years.
(Edited by Joby Puthuparampil Johnson)