AdvantEdge, Smile Group invest in intercity bus service operator Zingbus

Long-distance bus operator Zingbus has raised an undisclosed amount in a seed funding round from venture capital firm AdvantEdge Partners and internet investment and advisory company Smile Group. 

Some undisclosed strategic angel investors also participated in the round.

Owned and operated by Zingbus Technology, the Gurugram-based startup will use the funds to scale its network and launch in new routes, Kunal Khattar, managing partner at AdvantEdge, said in an email response to TechCircle.

With a fleet of over 20 buses, Zingbus currently connects over 30 cities across north India. It operates in more than 10 routes, including many hop-on-hop-off transit stations along the way. The startup claims to improve the quality of long-distance bus commute by bringing in predictability, punctuality, safety and hassle-free boarding to users’ travel experience.

The startup was founded last year by former executives at intracity bus aggregator ZipGo Prashant Kumar and Mratunjay Beniwal, along with the former technology lead of intercity taxi service provider Aha Taxi Ravi Kumar Verma.

“Zingbus is looking to break this endless loop of low margins and low standards in the industry by building a full-stack technology enabled fleet of inter-city buses in a marketplace model, offering standardised experience at an affordable price,” AdvantEdge said in a blog post.

According to the blog, the company has implemented a slew of strategic optimisations such as higher asset utilisation by extending route lengths, non-traditional curb-side pick-up and drop-off points and creating a hub-spoke model allowing for one-stop connections for its network.

The company expects these optimisations to help reduce cost per seat kilometre, increase revenue per seat kilometre, and improve occupancy and utilisation levels.

An early-stage technology fund, AdvantEdge invests across consumer sectors with a focus on mobility. It also runs incubation programmes for pre-product market-fit startups. It has backed companies such as Rapido, Shuttl, Tripoto, Sheru, TrulyMadly, OnlineTyari, Chalo, ScoopWhoop, IIMJobs, GamingMonk and FrontPage.

Smile Group, founded in 1999 by Harish Bahl and Manish Vij, is a platform that builds internet businesses with entrepreneurs. It partners with fast-growing companies for their expansion and invests in disruptive companies. Its portfolio includes craft beer maker Bira, software innovation provider and hackathon organiser HackerEarth, bike taxi aggregator Rapido and shared scooter rental startup Vogo.

A fragmented and unorganised segment, intercity bus commute is largely an untapped sector, even as most other transportation modes, from cab-hailing to car and bike pooling, freight and logistics trucking are increasingly impacted by technology-enabled solutions. Long-distance bus transportation is marred by unsafe, unhygienic and sub-standard service levels.

While redBus brought in useful innovation in the segment to solve the discovery and booking piece of the puzzle, user experience and service quality remained unchanged and largely poor. Online travel agencies do not go beyond bus discovery and therefore, it’s an interesting market to disrupt with connected technologies.

According to AdvantEdge, over 20 million people commute between cities in India everyday, of which 55% use intercity buses, 40% travel via railways and the remaining 5% use airlines, taxis and personal vehicles. The company estimates intercity bus travel to be a $20 billion annual opportunity.

Zingbus will primarily compete with traditional private operators besides a few emerging startups.

Online travel startup RailYatri has been trying to establish a presence in this segment with its ‘IntrCity’ bus service. Early this week, its parent company Stelling Technologies raised $13.9 million in a fresh round of funding led by Infosys co-founder Nandan Nilekani’s NRJN Family Trust. The latest round takes the total capital raised by the company to $30 million.

Last month, another long-distance bus service operator Yolobus raised $600,000 in a seed funding round from a group of angel investors from the mobility industry.

Flixbus, one of the largest intercity bus networks in Europe with a valuation of over $2 billion, is expected to launch its services in India soon.