Chilean energy firm COPEC’s venture arm led the round.
Montréal-based travel tech startup Busbud sees room to grow south of the equator.
The Canadian firm has secured $14 million CAD ($11 million USD) in equity funding led by Wind Ventures, the corporate venture capital arm of Chilean energy firm COPEC, and acquired Chile-based intercity bus marketplace Recorrido to support its Latin American expansion plans.
Busbud has experienced some recent growth following a rebound in travel demand and its expansion beyond just selling bus tickets.
Like most travel companies, Busbud’s bus travel booking business was hit hard by the pandemic, forcing the startup to adapt its approach.
After experiencing some recent growth following a rebound in travel demand and its expansion beyond just selling bus tickets, Busbud sees reason for optimism and space to grow its footprint in Central and South America.
“The pandemic was absolutely the hardest thing that we’ve been through as a company, especially managing through the first few waves and variants of COVID,” Busbud co-founder and CEO LP Maurice told BetaKit in an interview. “But the team really has shown this incredible resilience [and has] been heads down for the last two years just building for this exact moment of recovery that’s happening now. We’re finally — in the last few months — seeing tremendous growth as a result of that.”
Founded in 2011 by Maurice and two of his friends, CTO Michael Gradek and CPO Frédéric Thouin, Busbud allows users to search, compare, and book intercity bus tickets on over three million bus routes worldwide from more than 3,900 bus companies in 16,000 cities across 80-plus countries, in 17 languages.
In addition to Wind Ventures, Busbud’s latest financing also saw follow-on participation from the Canadian Business Growth Fund (CBGF), Export Development Canada (EDC), and Singapore-based K3 Ventures. The fresh capital brings Busbud’s total funding to approximately $55 million CAD ($44 million USD).
Busbud’s other backers include Investissement Québec, Inovia Capital, OMERS Ventures, Real Ventures, BDC Capital, Revolution Ventures, Plaza Ventures, FJ Labs, Claridge, Teralys Capital, and angel investors who have served in exec roles at Expedia, Google, Facebook, Airbnb, and TripAdvisor.
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Maurice described the raise as a follow-on to Busbud’s $15 million CAD 2020 Series C round, which was led by CBGF and Investissement Québec, and saw participation from EDC and K3. He said it was closed at a higher valuation than Busbud’s Series C financing, but declined to disclose that valuation, adding that Busbud is preparing to raise a “much larger” Series D round “later this year.”
Busbud has felt the pandemic’s widespread impact on the travel sector, which put a dent in the company’s revenue and led the startup to layoff some of its staff in April 2020 as demand for Busbud’s service dropped amid rising public health concerns and travel restrictions.
The Montréal startup wasn’t the only Canadian tech company in the travel space that was hit hard by the pandemic — Sonder and Hopper also conducted significant layoffs during the beginning of COVID-19. But, like Busbud, both firms made adjustments, saw their businesses bounce back as travel resumed, and raised fresh funding since then.
The pandemic led Busbud to revise its approach and move beyond just bus booking and into other types of ground transportation like train, ridesharing, and shuttle trips.
On top of this, the startup also added a bunch of new functionalities to its platform to help its users cope with the pandemic, including cancellation insurance and a feature that displays informational messages to travellers, such as schedule changes and COVID-19-related health measures.
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Busbud closed its Series C round in September 2020 to build on these efforts. Since then, the startup claims it has seen significant growth, including revenue growth of 280 percent year-over-year in December 2021.
Maurice attributed this rise to a rebound in travel demand and Busbud’s new “multi-modal” approach, which permits travellers to book train tickets from Amtrak in the United States, Via Rail in Canada, and operators like Eurostar, Renfe, and Trenitalia in Europe, in addition to ridesharing and shuttle options.
According to Maurice, Busbud’s sales volumes have now surpassed 2019 levels during the same periods. In January and February 2022, he said the company has seen “record sales weeks” during a stretch that is typically the slowest travel period of the year.
Busbud is preparing to raise a “much larger” Series D round “later this year.”
“This is really showing us that the Omicron variant is starting to phase out progressively, and we think this is actually a super strong leading indicator for growth — really, explosive growth for us — in spring and summer, which are traditionally, as you can imagine, our highest [volume] seasons,” said Maurice.
Recorrido represents Busbud’s second and largest acquisition to date. Maurice declined to disclose the acquisition price, but said Busbud paid a combination of cash and equity to acquire the Santiago-based mobility startup, financing the former portion with proceeds from the funding round.
Maurice said Busbud was attracted to Recorrido’s 30-person team, which is joining the startup’s 60-person staff as part of the deal. Busbud plans to keep the Recorrido brand alive and leverage the reputation it has built in the Latin American region as a trusted travel brand.
The CEO added that there will be “collaborations” between the two firms on the tech side, highlighting that Recorrido has established a strong “local platform,” while Busbud has constructed a “global platform,” which gives the two companies the chance to learn from one another.
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As part of the acquisition, Recorrido’s shareholders have secured equity stakes in Busbud, including local Latin American investors IGneous, Mountain Chile, Wayra Chile — the investment arm of Spanish telecom leader Telefónica; European funds Mountain Partners and Mercurius Private Equity; and Recorrido’s co-founders. Additionally, Recorrido co-founder and CFO Julian Valentin Deutschle is joining Busbud’s board of directors as an observer.
Latin America is one of Busbud’s three “core” markets, alongside North America and Europe. Busbud has operated in the region for six years.
According to Maurice, bus travel is particularly important in Latin America, where he said there are few train connections relative to bus connections, and few tech competitors for booking bus tickets, especially for tourists facing a language barrier. Today, the startup serves millions of travellers in the region monthly.
With the help of Recorrido and Wind Ventures’ reputation and connections in the region, the startup sees a chance to grow that presence, particularly for locals given that Busbud currently caters primarily to international tourists and Recorrido is geared towards local users.
“We believe [Busbud] is positioned well to be the global ‘Expedia’ for bus travel.”
-Brian Walsh, Wind Ventures
According to Brian Walsh, head of Wind Ventures, the bus ticket-buying sector is “clearly underserved” and “huge” in Latin America, where it is “really important to the region’s culture and way of life.”
“We found a really compelling market, a big opportunity for digital to make a material impact and, then, we found Busbud with a fantastic team that we believe is positioned well to be the global ‘Expedia’ for bus travel,” Walsh told BetaKit.
Maurice expects Wind Ventures to play an important role in supporting Busbud’s operations in the region. “We think that they can add a lot of value for us and open a lot of doors, both commercially and also strategically, in the [Latin American] region,” he said, citing its connections with other players in Latin America, including mobility operators and investors.
Feature image courtesy Busbud.