A company that was named amongst the world’s 50 most innovative companies, alongside Apple, Facebook and Google by business magazine, started with a boom ended with a boom. redBus.in is the second highest transacted travel website in the country, next only to IRCTC. Phanindra Sama, the chief executive officer of redBus.in, is yet another engineer who chucked his lucrative job to start an enterprise of his own.

In June 2013, redBus announced that they had sold the company to South African media giant Naspers through its Indian subsidiary, ibiboGroup, for around USD 120 million (approx. INR 790 crore) at a gross merchandise value (GMV) of around Rs. 600 crore. This was the biggest overseas strategic acquisition of an Indian internet asset. the redBus story has many lessons that every aspiring entrepreneur can take up as a precious lesson. Let’s dig deeper into this story. redBus was a unique concept a service that simplified booking bus tickets for travelers.

redBus Started :


An exhausting experience while booking bus tickets to visit his hometown for Diwali sparked an idea in his mind. Travel agents often had no clue about the actual booking status. This led to a lot of overlapping bookings and time mismanagement. There was a time when internet barely had any existence and then at the same time the dot com bust took place shaking its every pillar of foundation. The ‘who’s-who’ went down the drains with this crash.

In 2005, Sama has failed to get bus ticket from Bangalore to Hyderabad during Diwali festival. This was discussed with 2 other friends and they got this idea of starting online bus ticketing service. They have started Redbus.in which provides service across India. RedBus is part of Pilani soft labs founded in 2006 by these 3 BITS Pilani graduates.

He realized some key issues with the then-existing bus model and found internet as the best medium for solving these issues by putting together information on a platform where customers could access it easily and take better decisions. The first advice he gave to Sama and his teammates made a lasting impression on the minds of these aspiring entrepreneurs and led them to build one of the most successful ecommerce ventures in the country.

2A collective funding of INR 5 lakhs from their savings they started building a portal. This was the beginning of redBus! One of the rooms of the house they stayed in became their office.

When the prototype was ready, they went to the bus operators and tried selling it to them, but they were not even willing to take it for free. It was like, they were trying to disturb the status quo. We didn’t know what to do. That was when they heard of TiE, Bengaluru, and went to them with the business plan. These mentors helped them make their business what it was. They gave them assignments for every week wherein they had to do a market survey of the number of buses, the number of routes, the average price of a ticket, how people buy tickets, the profile of customers, how much commission a bus operator pays to an agent, etc. As a whole, they helped them get a generalized idea of the industry.

redBus Come Ahead :


Their initial asking was for INR 3 million and when one of the VC’s spent hours with them revising the plan, that figure multiplied to INR 30 million which was finally agreed on. They used these funds for the betterment of redBus and to strengthen its base. They also built a Software as a Service product short for SaaS for bus operators which handled licensing, upgrades and maintenance of the software and from here onwards redBus was no more just a “travel company.”

Their revenue graph just went on increasing, they started off with a mere INR 5 Million revenue in FY07 with no profits, and directly jumped to INR 50 Million in FY08, followed by INR 300 Million in FY09 and finally a massive INR 600 Million in the FY10. Pilani Soft Labs has this flagship product RedBus. RedBus has raised $ 6.5 Million in 2011 in a C-Series funding of Helion Venture Partners, Seed fund and Investor capital partners.

redBus name confirmed :


Once Sama was reading the autobiography of Richard Branson who started the Virgin brand. The way he rose up from poverty fascinated me. The Virgin brand is red in color. Marketing becomes easier if you have a color. As they are an Internet-based company, people would have to type the name. So, it was better to have the easiest name.

Sama Said that, “As we studied in BITS Pilani, we used to go via Delhi and there, you have red line and white line buses. Though we first thought of redline, the name was booked. Then we decided on redBus.”

Business Expansion of redBus :

4They slowly managed to grab the whole market, they now had 500 partnerships with bus and tour operators for 5000 routes. It covered 15 states primarily in South, West and North India and had also expanded to Central, North-East and East India.

redBus has been rated the most trusted brand in the online travel category and the 13th most trusted internet brand in the overall rankings as per the Brand Trust Report, India Study 2015. It also won an award for being ‘The Most Trusted Brand’ by IBC Info Media in 2015. In March 2014 it won the ‘Global Mobile Innovation in Travel Award announced by Eyefortravel.


Such immense growth and popularity redBus had managed to clock USD 120 Million in gross merchandise value in February 2013. This gave a big boost to their business value. They also acquired a tie-up with Karnataka State Road Transport Corporation (KSRTC) to sell both state owned and private bus operators in Karnataka.

Though several investment partners come forward to acquire Redbus, Nasper-ibibigroup has been constantly focusing on the strengths of Redbus. Finally ibibigroup discussed with the promoters and announced the acquisition of RedBus.

RedBus has Sold the company to the Ibibio Group for around USD 120 million at a gross merchandise value (GMV) of around Rs 600 crore. This was the biggest overseas strategic acquisition of an Indian internet asset. A company that was named amongst the world’s 50 most innovative companies, alongside Apple, Facebook and Google by business magazine, started with a boom ended with a boom.

“Focus on the ease of use and convenience of your solution to get the success in your life.”


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