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Business News/ Companies / Abhibus appoints Kotak to raise $40 million
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Abhibus appoints Kotak to raise $40 million

The funds will used to create brand awareness, enhance user experience, and expand into newer markets in the north

Abhibus started in 2007 as a back-end technology provider to bus operators, both private and state-owned. Premium
Abhibus started in 2007 as a back-end technology provider to bus operators, both private and state-owned.

Hyderabad: Abhibus Services (I) Pvt. Ltd, India’s second biggest online bus booking agent, is in advanced talks with five private equity firms and strategic investors to raise $10 million to create brand awareness, enhance user experience, and to expand into newer markets in the northern part of the country.

Abhibus on Monday said it had appointed Kotak Investment Banking to raise a total of $40 million from private equity funds.

The Hyderabad-based firm initially plans to raise $10 million and will raise the remaining $30 million over the next two years, Sudhakar Reddy Chirra, founder and chief executive officer of Abhibus, said.

“To remain upbeat on the expected growth rate, we have laid the expansion plans and fund raising would support our growth plan," Chirra said.

Chirra declined to identify the investors he was in talks with, but said some of them were overseas-based. “We are also looking for an investor who has expertise in online," Chirra said. Abhibus raised $4 million in 2012 from an unnamed Hyderabad-based investor in exchange for a stake in the company.

Abhibus started in 2007 as a back-end technology provider to bus operators, both private and state-owned. Apart from bus operators, its software and services were also used by some online bus ticketing agents including Redbus, which later developed its own passenger reservation system.

In 2012 Abhibus launched its website to allow consumers to directly book tickets on its platform. It currently sells 12,000 tickets a day, and has a 10% market share, according to Chirra. Redbus, which was acquired by Ibibo Group in 2013, is the market leader.

Bus ticketing, according to Abhibus data, is a 25,000 crore industry with e-ticketing contributing to 15% of the sales.

Abhibus generated 160 crore of revenue in fiscal 2013-14 and is on track to touch 250 crore by March 2015, Chirra said in an earlier interview in November. The company is not profitable yet but is “close to breakeven".

Abhibus has tie-ups with 175 bus operators in the country including the transport utilities of Andhra Pradesh, Tamil Nadu and Rajasthan.

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Published: 23 Feb 2015, 11:55 PM IST
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