IBEF: December 18, 2019
FlixBus, largest intercity bus network in Europe, which is backed by investors General Atlantic and Silver Lake, is looking to enter into Indian market.
The company works on the same model as already existing cab service aggregators such as Uber or Ola. Though, the company does not own any bus or hire drivers, but it provides operational support, such as scheduling, and ticketing, among other things. It partners with the regional bus operators and provide rides across Europe and in the US. The idea on which it works is the principle of dynamic pricing, through an online platform and a FlixBus app.
"We recently started our recruitment for the Indian market and the project is still in an early business development stage," said a spokesperson of FlixBus Global.
The company is among the most successful German start-ups and was launched by Mr Daniel Krauss, Mr Andre Schwammlein and Mr Jochen Engert back in 2013, after deregulation of the bus market in that country. FlixMobility is the parent company of FlixBus, which has also launched train services. The firm works with around 300 independent bus and train entities.
FlixBus began expanding internationally in 2015, with long-distance networks in France, Italy, Denmark, Netherlands and Croatia, as well as cross-border services to Norway, Spain and Britain. It connects a little more than 2,000 destinations in 30 countries, according to the company.
In August, FlixMobility said it had extended a Series-F funding round by partnering with Baillie Gifford, Luxor Capital Group and Odyssey 44, with additional investment given through funds and accounts managed by BlackRock. The capital raised will be used to for further global expansion and to launch a new FlixMobility service, FlixCar. The company would be a ride sharing platform that will add to the existing FlixBus and FlixTrain networks, as well as the company's charter platform, said the company.
Market leadership can be achieved with the help of these funds in the US by 2020, it will also see buses in South America and Asia, it said.
The new investors aside from the existing shareholders include General Atlantic, a leading global growth equity firm, and Silver Lake, a global player in technology investment. The company entered the US markets last year.
In India, it is expected that the entry of FlixBus could lead to a big shift in intercity transport. Although, there are operators that are offering online platforms for ticketing and customer support, but there is no Uber-like standardisation of services on a large scale.
Bus is the most reported means of transport in both rural and urban areas, as per an official survey titled 'Key indicators of household expenditure on services and durable goods' in 2014-15. Around 66 per cent of households in rural areas and 62 per cent in urban areas reported expenditure on bus travel.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.