iBus eyes three acquisitions by September with $200 mn funding from NIIF

Digital infrastructure services provider iBus Network and Infrastructure Pvt Ltd aims to complete three acquisitions by September, following a $200 million, approximately ₹1,680 crore, investment from the National Investment and Infrastructure Fund (NIIF), which has acquired a controlling stake in the company. The companies announced the fundraise on Wednesday.

About half of this investment will be allocated towards acquisitions in the company’s core sectors—namely, in-building solutions, outdoor small cells, and managed Wi-Fi services, group chief executive officer Ram Sellaratnam told Mint in an interaction. Mint had reported about the company's fundraise in two reports in February, and January last year.

Bengaluru-based iBus builds digital infrastructure such as Wi-Fi connectivity within buildings, and is testing projects on IoT.

“Two are in the mobility space, one of them in the in-building solutions, the second is in small cell for indoor and outdoor and the third is on the Wi-Fi platform, which will have footprint for hospitality out of India, that will give us opportunity for inorganic growth overseas,” Sellaratnam said. “It will be in the first two quarters of FY25."

iBus, backed by Morgan Stanley Infrastructure Partners, has acquired a clutch of companies in the passive telecom infrastructure sector over the last few years. Last year, it acquired Microsense Networks, a Chennai-based company with operations across India, the US, the United Arab Emirates, Sri Lanka, and the Maldives, providing Wi-Fi infrastructure to the hospitality and retail industries, including malls and hotels. 

In 2022, iBus also acquired Wi-Fi-managed service assets from D-VoiS Communications, gaining entry into the education and co-living spaces, in addition to hospitality. Additionally, it acquired Ubico Networks, known for its design, deployment, and maintenance of shared in-building passive telecommunication infrastructure.

Sellaratnam said that iBus plans to expand and increase its presence in international markets such as Indonesia, Sri Lanka, and Thailand where it has its hospitality services platform.

iBus intends to introduce additional services on its Infrastructure-as-a-Service (IaaS) platform. For starters, its energy-as-a-service vertical will be a focus growth area where the company deploys its sensors to bring down energy consumption by a fourth. It will also scale up its Wi-Fi platform for hospitality sector where guestroom entertainment solutions will be added to Wi-Fi- managed services. It already has 15 customers in each of these segments.

“We are connecting the nodes and harnessing the data, thus we’re getting into data economy. Therefore, the space we’re in has a 10-15x runway, and we’re just beginning to scale,” he added.

As part of its strategy for international expansion, iBus will prioritize Wi-Fi-managed services within the hospitality industry, targeting high-income western markets and countries like Australia, New Zealand, South Korea, and Dubai. This strategy includes tapping into existing relationships with major hotel chains such as Marriott and Hilton.

Around 40% of the investment will support organic growth initiatives. Domestically, the company will concentrate on the mobility sector, targeting an estimated 6-8 billion sq. ft of real estate to be developed over the next four years, where its solutions could be implemented. Additionally, providing indoor Wi-Fi coverage for educational institutions is anticipated to be a growth area, with an expected compound annual growth rate of 30-40%.

This $200 million investment from NIIF's $2.3 billion Master Fund, advised by Avendus, represents the largest funding round for iBus, which previously raised ₹125 crore from the Japanese financial services group Nomura in September 2022, and ₹150 crore from Morgan Stanley’s North Haven India Infrastructure fund in April of the same year. 

Prior funding rounds include a $40 million investment from notable investors such as Vallabh Bhanshali of Enam, US-based N Squared, and TV Mohandas Pai, among others.