Startups People

Building a product is easy but to sell it is so hard: YourBus co-founder Rajesh Mallipeddi

31 Mar, 2014

Online bus tracking and analytics startup was rather unknown until ibiboGroup (owned by South African media conglomerate Naspers Group) acquired it a few days ago. YourBus, which is owned and operated by Bangalore-based Lucido SoftLabs Pvt Ltd, is now joining a slew of startups in India, including Little Eye Labs and redBus which were acquired by global majors. YourBus is now looking to reach out to more clients and is confident that the acquisition will help it achieve its larger goals. met YourBus co-founder Rajesh Mallipeddi to know more about the deal and the company's future plans. Here are the edited excerpts:

You are a pretty young startup having started towards the end of 2011. What made you decide to sell the company so soon?

As you know, we are creating value by providing a bus tracking and analytics platform to operators and passengers in India. We were relatively unknown before this ibiboGroup deal happened.

We have been working closely with online bus ticketing site redBus for the past few months which actually took us to ibiboGroup.

We later realised that getting good scale in terms of clients is very important for a company like ours. You can take it from zero to 200, but you need to partner with major players to take the company to the next level. That's how we decided to grab the opportunity when ibiboGroup approached us with a deal. Indeed, the redBus team played a vital role in connecting us with the group, which also found our product very impressive.

Were you confident enough to build a niche product when you started?

We wanted to build a product which could be useful to passengers and bus operators alike, which could make difference to them, and we succeeded in that attempt.

You never raised external funding other than the seed money you got from The Morpheus? Did this eventually lead to selling of the firm?

Indeed, we had raised a small round of funding in the initial days. However, we didn't go for VC funding. Even if we had raised VC funding, our journey was going to take longer, not just because of financial limitations but also because of logical limitations like connecting with operators, etc. Frankly speaking, we never looked at VC funding because it was not the limitation we had but the right placement of the product was.

When did the deal come in? Did you have more buyout offers before signing the deal with ibiboGroup?

Indeed, the deal happened gradually. As I mentioned earlier, we were already in touch with redBus. We started the mobile integration of our product in March-April last year which was useful for redBus and its clients. A couple of months later, they introduced us to the ibiboGroup. The real discussion happened four-five months after redBus was acquired by Naspers Group in July. Our primary objective was to provide a solution that could make a difference to bus operators and passengers, and not to sell the firm. I cannot comment to your question on more buyout deals.

What sort of deal value did you sign on the dotted line? What will happen to the YourBus platform and the team, post the deal?

I am not allowed to share the transaction details but the deal has already been closed. Our platform will be integrated into ibiboGroup's online properties, including and However, we are yet to start working on the integration part, and it might take a couple of months.

As part of the deal, the entire team, except my other co-founder Satya P Devarakonda, has joined the ibiboGroup. He (Devarakonda) has already started a new venture called ZapStitch, a cloud-based data integration platform. The company was started towards the end of last year and it has already bagged more than 100 clients overseas.

Our company will be operated as a separate entity under the YourBus brand.

What are your future plans? Will you take the product to global markets?

Our main objective is to reach out to more bus operators and passengers in India. So initially we will continue to focus on the domestic market. I don't have any idea about ibiboGroup's plans. We need to sit and chalk out the future plans.

What is your take on the startup eco-system in India, given that the country witnessed many huge exits recently?

When you start something, VCs always ask about the market and so many other questions. From my understanding, there is more scope for exits in India, which will make more VCs to invest in companies. It is good for the economy, too.

How hard was it to set up a company from scratch? What is the most defining moment in your startup journey?

Starting a company was not so hard, but selling the product to operators was. It was one of the biggest challenges in our journey, as operators suspected if this would work or not. So, we needed to sell the product at a meagre margin.

There are many defining moments in our journey. One I can recollect now is that seeing our product, our first customer said 'it is unbelievable'.

(Edited by Joby Puthuparampil Johnson)