redBus - A Start-up with a New Outlook*

            

Details


Case Code : CLMISC015
Publication date : 2013
Subject : Miscellaneous
Industry : Software & E-Commerce
Length : 04 Pages
Teaching Note: Not Available

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

To overcome constraints in bus ticketing system, Pilani Soft Labs Pvt Ltd, Bangalore launched an on line portal through its website ‘redBus.in”. In a short span of time, this web portal gained prominence in the industry and could be able to generate considerable business to the promoters. Taking a note of its reputation leading players in the e-commerce field came forward to take stake in its business quoting a higher price which surprised the market participants. Taking a note of the above points, this case let focused on the issues that resulted for Pilani Soft Labs Pvt Ltd to gain prominence and to value at a higher price.

Issues:

To quote as an example in promoting Innovation and Entrepreneurship.
To illustrate the importance of customized software in meeting specific business requirements.
To describe the role of E-Commerce in creating new business opportunities.

Introduction

On June 21, 2013, the ibibo Group (MIH Group), the Indian subsidiary of South Africa-based media conglomerate Naspers , confirmed the acquisition of Pilani Soft Labs Pvt Ltd (Pilani), Bangalore. This was one of the biggest deals in the history of start-ups in India, especially in the field of e-commerce. Though ibibo CEO Ashish Kasyap (Kasyap), who made the announcement, did not mention the actual figure at which the deal had been finalized, media reports put it at an estimated $ 125 million. This was 1.25 times of Pilani’s expected revenue ($100 million) for the year 2013.

Pilani’s flagship product was an online bus ticketing system, popularly called “redBus.in”. The idea behind launching this web portal was to integrate the unorganized bus industry in India and to create an interface between the travelers, bus operators, and travel agents. The redBus.in web portal aimed to serve as a common agent for all the bus operators registered with it. For every ticket booked through this web portal, Pilani charged a commission from the bus operator. The rate of commission charged varied between bus operators. This was the major source of revenue for Pilani and formed around 85%-90% of its total revenue. A media statement from Pilani in July 2012 stated that it had sold over 10 million bus tickets and had a customer base of 2 million...

Key words:
redBus, ibibo Group, Naspers, Acquisition, Online ticketing





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