BlaBlaCar, the carpooling giant born in France, aims to expand on a new market segment with the acquisition of international bus ticketing platform Busfor. The news was reported today by business daily Kommersant, which cites exchanges with BlaBlaCar’s CEO Nicolas Bruisson and Busfor co-founder Ilya Yekushevsky.
The deal, which is still subject to regulatory approval, could be completed in Q4 2019. The terms of the agreement are not disclosed, but Kommersant heard from unnamed industry insiders that a no-money transaction is not ruled out, with Busfor’s shareholders receiving a stake in the French unicorn.
One of these sources believes that Busfor’s options were limited due to the small amount of cash remaining in the company’s coffers, in spite of the $8.5 million injected by its shareholder Vostok New Ventures (VNV) in 2018. As of Q2 2019, Busfor was valued at $69.95 million, according to the financial report of the Swedish investment firm, as reported by Kommersant.
If confirmed, the deal will mark an important step towards the consolidation and digitization bus ticketing market in Russia and other countries where both BlaBlaCar and Busfor will jointly operate.
A French-Russian success story
BlaBlaCar entered the Russian and Ukrainian markets in 2014 through the acquisition of Ukrainian site Podorozhniki. Activity in Russia quickly reached a “phenomenal level,” as stated by Bruisson in a past interview – to such an extent that BlaBlaCar, in addition to asserting itself as the market leader in Russia, saw this country become its largest market, even before France.
BlaBlaCar asserted its leadership even more strongly last year with the acquisition of BeepCar, a competing carpooling service run by Mail.Ru Group. In early 2019 BlaBlaCar began publishing bus ride offers on its Russian platform.
BlaBlaCar claims to have invested more than $10 million to develop its service in Russia, which is used today by “over 20 million members” with “more than 100,000 daily rides.”
BlaBlaCar has two shareholders in common with Busfor: Baring Vostok, the famous US-led Russian private equity firm, which invested €21.3 million in the company in 2016, and VNV, which could see its stake in BlaBlaCar increase as a result of the acquisition of Busfor.
A global bus ticketing major born in Eastern Europe
Launched in Ukraine in 2010, Busfor — previously known as Gillbus — is now headquartered in Poland. It operates in a Belarus, Russia, Ukraine; in a range of EU countries including Albania, Austria, Bulgaria, Czechia, Italy and Poland; as well as in Thailand and other emerging countries.
The company claims to partner with more 700 bus transport companies, and hopes to sell more than 10 million tickets in 2019. According to Yekushevsky, the number of sold tickets more than tripled in 2018.
The average ticket price amounts to $22, with Busfor getting a 15% fee on each sale, reported Kommersant last year, citing company data.
The bus transportation market in Eastern Europe and the former Soviet Union amounts to some $9 billion, with online ticket sales accounting for just 2%-5% in 2018. Busfor believes online sales will grow to some 30% by 2022, and aims to control a third of this volume.
Since its inception in Ukraine in 2010, Busfor has received financial support from Intel Capital, InVenture Partners and FinSight in 2014, from Ukraine’s Chernovetskyi Investment Group (CIG) in 2015, then from Baring Vostok and Elbrus Capital in 2016. In November 2017 InVenture Partners sold its share to Baring Vostok and Elbrus Capital. The last capital injections took place in 2018 as noted above.
Update Dec. 26, 2019: Busfor was valued at $88.3 million in the transaction which saw BlaBlaCar acquire the company, as can be deduced from Vostok New Ventures’ financial report. The Swedish fund had its 12.3% stake valued at $10.9 million.
