The venture capital arm of Chilean energy company COPEC led the round.
Montreal-based travel tech startup Busbud sees room to grow south of the equator.
The Canadian company secured C$14 million (US$11 million) in equity financing led by Wind Ventures, the venture capital arm of Chilean energy firm COPEC, and acquired Chilean intercity bus market Recorrido for support its expansion plans in Latin America.
Busbud has seen recent growth following a rebound in travel demand and its expansion beyond just selling bus tickets.
Like most travel agencies, Busbud’s bus travel booking business has been hit hard by the pandemic, forcing the startup to adapt its approach.
After experiencing recent growth following a rebound in travel demand and expanding beyond just selling bus tickets, Busbud sees reason for optimism and space to expand its footprint in Central and South America.
“The pandemic has absolutely been the hardest thing we’ve been through as a company, especially dealing with the early waves and variants of COVID,” Busbud co-founder and CEO LP Maurice told BetaKit. in an interview. “But the team really showed this incredible resilience [and has] been headlong for the past two years, just building for this exact moment of recovery that is happening now. We are finally seeing – over the last few months – phenomenal growth thanks to this.
Founded in 2011 by Maurice and two of his friends, CTO Michael Gradek and CPO Frédéric Thouin, Busbud allows users to search, compare and book intercity bus tickets on more than three million bus routes worldwide from of more than 3,900 bus companies in 16,000 cities across 80 -plus countries, in 17 languages.
In addition to Wind Ventures, Busbud’s latest funding also saw follow-on participation from the Canadian Business Growth Fund (CBGF), Export Development Canada (EDC) and Singapore-based K3 Ventures. The new capital brings Busbud’s total funding to approximately C$55 million (US$44 million).
Other Busbud backers include Investissement Québec, Inovia Capital, OMERS Ventures, Real Ventures, BDC Capital, Revolution Ventures, Plaza Ventures, FJ Labs, Claridge, Teralys Capital, and angel investors who have held leadership positions at Expedia, Google, Facebook, Airbnb, and TripAdvisor.
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Maurice described the raise as following Busbud’s C$15 million 2020 Series C round of funding, which was led by CBGF and Investissement Québec, and saw participation from EDC and K3. He said it closed at a higher valuation than Busbud’s Series C funding, but declined to disclose that valuation, adding that Busbud is preparing to raise a “much larger” Series D round “more later this year.”
Busbud has felt the pandemic’s widespread impact on the travel industry, which has hurt the company’s revenue and led the startup to lay off some of its staff in April 2020, as demand for the service Busbud fell amid growing public health concerns and travel restrictions.
The Montreal startup wasn’t the only Canadian travel tech company to be hit hard by the pandemic — probe and Hopper also made significant layoffs at the onset of COVID-19. But, like Busbud, both companies have made adjustments, seen their business rebound as travel resumed, and have raised new funds since then.
The pandemic has led Busbud to revise its approach and move beyond simply booking buses and other types of ground transportation like train, carpooling and shuttle rides.
On top of that, the startup has also added a bunch of new features to its platform to help its users deal with the pandemic, including cancellation insurance and a feature that displays informative messages to travelers, such as schedule changes and health related to COVID-19. measures.
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Busbud closed its Series C in September 2020 to build on these efforts. Since then, the startup claims to have experienced significant growth, including 280% year-over-year revenue growth in December 2021.
Mauritius attributed the rise to a rebound in travel demand and Busbud’s new “multimodal” approach, which allows travelers to book train tickets from Amtrak in the United States, Via Rail in Canada and operators like Eurostar, Renfe and Trenitalia in Europe. , in addition to carpooling and shuttle options.
According to Maurice, Busbud’s sales volumes have now exceeded 2019 levels during the same periods. In January and February 2022, he said the company experienced “record sales weeks” during what is typically the slowest travel time of the year.
Busbud is preparing to raise a “much larger” Series D round “later this year.”
“It really shows us that the Omicron variant is starting to fade out, and we think that’s actually a very strong growth leading indicator – really, explosive growth for us – in the spring and summer, which are traditionally, as you can imagine, our highest [volume] seasons,” Maurice said.
Recorrido represents Busbud’s second and largest acquisition to date. Maurice declined to disclose the acquisition price, but said Busbud paid a combination of cash and equity to acquire the Santiago-based mobility startup, funding the first part with proceeds from the funding round.
Maurice said Busbud was attracted to Recorrido’s 30-person team, which joins the startup’s 60-person team as part of the deal. Busbud plans to keep the Recorrido brand alive and build on the reputation it has built in the Latin America region as a trusted travel brand.
The CEO added that there will be “collaborations” between the two companies on the technology side, pointing out that Recorrido has established a strong “local platform”, while Busbud has built a “global platform”, which gives both companies the chance to learn. one of the other.
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As part of the acquisition, Recorrido shareholders secured stakes in Busbud, including local Latin American investors IGneous, Mountain Chile, Wayra Chile – the investment arm of Spanish telecommunications leader Telefónica; European funds Mountain Partners and Mercurius Private Equity; and the co-founders of Recorrido. Additionally, Recorrido co-founder and CFO Julian Valentin Deutschle joins Busbud’s board as an observer.
Latin America is one of Busbud’s three “core” markets, alongside North America and Europe. Busbud has been operating in the region for six years.
According to Mauritius, bus travel is particularly important in Latin America, where there are few rail connections compared to bus connections, and few technological competitors for booking bus tickets, especially for tourists facing a language barrier. Today, the startup serves millions of travelers in the region every month.
With the help of Recorrido and Wind Ventures’ reputation and connections in the region, the startup sees a chance to increase this presence, especially for locals, given that Busbud currently caters mainly to international tourists and that Recorrido is geared towards local users.
“We believe [Busbud] is well positioned to be the global “Expedia” for bus travel.”
-Brian Walsh, Wind Ventures
According to Brian Walsh, director of Wind Ventures, the bus ticket buying industry is “clearly underserved” and “huge” in Latin America, where it is “really important to the region’s culture and way of life. “.
“We found a really compelling market, a great opportunity for digital to have a material impact and then we found Busbud with a fantastic team that we believe is well positioned to be the global ‘Expedia’ for people. bus trips,” Walsh told BetaKit. .
Mauritius expects Wind Ventures to play an important role in supporting Busbud’s operations in the region. “We believe they can add a lot of value for us and open many doors, both commercially and strategically, in the [Latin American] region,” he said, citing his links with other players in Latin America, including mobility operators and investors.
Featured image courtesy of Busbud.
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