Bangalore's redBus sold to South Africa's Ibibo in one of India's biggest overseas internet deals
22 Jun 2013
Pioneering bus ticketing service provider redBus has been sold for an undisclosed sum to the Ibibo group, a subsidiary of South Africa's Naspers, in one of the biggest internet deals in India in recent times.
Phanindra Sama and Charan Padmaraju, the engineers from Andhra Pradesh who created redBus seven years ago, have sold their stakes to Ibibo
Sama and Padmaraju together held 18.2-per cent stake in redBus before the sale. Other investors in the company, including SeedFund, Kanwal Rekhi's Inventus and Helion Ventures, have also exited redBus.
RedBus is said to have an enterprise value of over Rs600 crore, which makes it the biggest deal involving an internet firm in India since the world's largest marketplace Ebay bought Baazee.com in a $55 million deal in 2004.
Ibibo will add redBus to its existing travel assets that include online travel aggregator Goibibo.com and TravelBoutiqueOnline, an online platform that enables thousands of small and medium travel agents.
RedBus, however, will be a stand-alone entity and Sama and Padmaraju, both 32, will continue in their roles as CEO and new product developer. "Charan is the Sergey Brin (the Google co-founder who is currently involveded in the Google Glass project) of redBus," says Sama.
Alok Goel, the Google executive who moved to redBus as chief product officer last year, and Bharat Singh, the GE executive who came in as CFO last year, will also continue.
redBus aggregates 228,000 seats per day, sells more than a million tickets a month and has over 600 employees.
The gross value of transactions on redBus last year was about Rs600 crore, up from Rs350 crore in 2011-12 while the net revenue, or commission, of the company was much lower at Rs33 crore. The company is said to have made a net profit in 2011-12.
Ashish Kashyap, CEO of Ibibo Group, said the acquisition would make the group one of the largest in the online travel space.
Naspers has invested a little over $90 million into Flipkart to become its second largest shareholder after Tiger Global.
China's Tencent also holds a 20 per cent stake in Ibibo Group.
Mumbai-based investment bank Avendus Capital was the sole advisor to the deal.
