From Flixbus To Intercity, Brands Lay Pitch To Disrupt The Bus Market

The buses that these new firms offer are a far cry from the crumbling vehicles that state
governments run. After redBus cracked open the online ticketing market for bus travel,
another set of brands is looking to reorganise the way Indians board their buses. In what is
being dubbed as the uber-isation of the bus market, Europe’s FlixBus, home grown travel
marketplace RailYatri and a Gurgaon-based start-up Shuttl are test-driving their brands
around the challenges of a diesel-spewing, fragmented road travel ecosystem.

The newly launched and to-be launched bus services follow an aggressive thrust by redBus;
the online ticket marketplace has M S Dhoni as brand ambassador and has recently launched
an ad campaign apart from several on-ground communication initiatives. According to their
research, India’s intercity bus transport with seat reservation is worth approximately $4
billion and the market is growing annually at about 12-15 per cent. There is also a huge
unorganised, un-reserved market.

Clearly the potential is large but inter-city bus travel has not quite gripped the attention of
start-ups. Such services are still largely government-owned and managed. However, this is
changing. Recently FlixBus, Europe’s largest intercity bus network, announced plans for
India. The company does not own any buses nor does it pay the drivers. Instead it provides a
standardised service and operational support to help with scheduling, and ticketing, among
other things.

Less than a year ago, RailYatri, an app-based travel marketplace made its way down the same
road. It launched IntrCity in March 2019 and like FlixBus is focusing on convenient, clean
and easy travel. Shuttl a start-up still in its infancy plies a slightly different route, focusing on
daily commuters who cover large distances.

“The long-distance bus market has to take into account many problems which are unique to
India alone. For example, women safety is a concern. We are trying to tackle this issue by
offering GPS tracking services and CCTV cameras. Our mission is to uplift the bus travel
experience and integrate it with train travel,” says Manish Rathi, CEO and co-
founder RailYatri.

The buses that these new firms offer are a far cry from the crumbling vehicles that state
governments run—both offer buses equipped with toilets, charging points and wifi among
other facilities. “The branding of long-distance bus travel in India has to be focused on
convenience. That would be the key differentiation strategy,” said N Chandramouli, CEO,
and TRA Research.

While ease of travel is a key element of the pitch, the new companies are also keeping a close
eye on ticket prices, given that much of the country’s long distance commuters are budget
travellers. IntrCity said that its pricing is comparable to train travel. FlixBus, positioned as a

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cheap alternative to plane or train travel in Europe, said that in India, comfort and
convenience, rather than price, will be its unique selling points.

“For the likes of Flixbus or Railyatri, all branding and communication has to focus on
problem-solution, choice, flexibility, benefits, punctuality, more routes, polite service,
customer care and better infrastructure. Each of the above will need to be reflected in the
branding strategy to build differentiation and possibly a perceived premium,” said Sandeep
Goyal, Chairman, and Mogae Media.

While the new brands have the advantage of novelty and better service, experts believe that
they are up against a big task. Most importantly these buses will have to combat a host of
local and small-time operators who can cut prices down to the bare minimum. Rail Yatri data
show that there are more than 5000 bus operators operating 500,000 buses.

On the flip side, demand for bus travel is also growing phenomenally. RailYatri started with
two buses. In less than a year, it runs a fleet of 84 and has tied up with about 18 bus
operators. “The bus market in India can be categorised between mature markets and emerging
markets. In mature markets, the bus operators including state-owned busses compete with one
another to offer high quality services at competitive prices. The bus inventory provides a host
of options to passengers ranging from luxury to sleeper buses, AC or non-AC, timings and
price points,” said a redBus spokesperson.

The fact is that India is an under-penetrated market, say the brands and sector experts. And to
extract maximum leverage from their presence here, Intercity and Flixbus will need to nurture
and develop the emerging markets.

Business Standard: Mon, January 06 2020.

Europe's Largest Intercity Bus Network Plans To Enter Indian Market

FlixBus operates on the same model as cab service aggregators such as Uber or Ola

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FlixBus, largest intercity bus network in Europe, and backed by investors General Atlantic
and Silver Lake, is planning to venture into India. The company operates on the same model
as cab service aggregators such as Uber or Ola. It does not own any bus or hire drivers but
facilitates operational support, like scheduling, and ticketing, among other things. The
company partners regional bus operators, and offers rides across Europe and in the US. It
works on the principle of dynamic pricing, through an online platform and a FlixBus app.

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“We recently started our recruitment for the Indian market and the project is still in an early
business development stage,” said a spokesperson of FlixBus Global over e-mail. One of the
most successful German start-ups, it was launched by Daniel Krauss, André Schwämmlein
and Jochen Engert in 2013, after deregulation of the bus market in that country. FlixBus is a
subsidiary of FlixMobility, which has also launched train services. The firm works with
around 300 independent bus and train entities.

In 2015, FlixBus began expanding internationally, with long-distance networks in France,

Italy, Denmark, Netherlands and Croatia, as well as cross-border services to Norway, Spain
and Britain. It connects a little more than 2,000 destinations in 30 countries, says the
company.

In August, FlixMobility said it had extended a Series-F funding round by partnering with
Baillie Gifford, Luxor Capital Group and Odyssey 44, with additional investment provided
through funds and accounts managed by Blackrock. The capital raised will be used to fuel
further global expansion and to launch a new FlixMobility service, FlixCar. The latter would
be a ride sharing platform that will complement the existing FlixBus and FlixTrain networks,
as well as the company's charter platform, said the company.

The funds would also help in attaining market leadership in the US; by 2020, it will also see
buses in South America and Asia, it said. Apart from new investors, existing shareholders
include General Atlantic, a leading global growth equity firm, and Silver Lake, a global
player in technology investment. The company entered the US markets last year.

The entry of FlixBus could lead to a big shift in intercity transport in India. While there are
operators offering online platforms for ticketing and customer support, there is no Uber-like
standardisation of services on a large scale.

According to an official survey titled ‘Key indicators of household expenditure on services

and durable goods’ in 2014-15, the bus is the most reported means of transport in both rural
and urban areas. About 66 per cent of households in rural areas and 62 per cent in urban areas
reported expenditure on bus travel.

Business Standard: December 17 2019.

After Metro, Bounce's Scooters To Be Available At Railway Stations

The firm has won a competitive bid to provide its dock less scooter-sharing service at the
railway stations in Karnataka making it the first such start-ups to win such a deal

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Bounce’s scooters to be available at railw ay stations

After metro stations, bike-sharing start-up Bounce is now driving into railway stations. The
Accel and Sequoia-backed company has won a competitive bid to provide its dock less
scooter-sharing service at the railway stations in Karnataka. This makes it the first start-up to
win such a deal. The company will be able to expand its operations across 13 Bengaluru
railway stations, helping passengers in the city with first and last-mile connectivity.

“With the load on road infrastructure, there is an urgent need to shift away from personal
mobility to public transportation and shared mobility. To increase adoption of public
transportation, it’s imperative to create integrated multimodal connectivity to make daily
commute seamless,” said Vivekananda Hallekere, chief executive officer (CEO) and co-
founder, Bounce.

“We’re happy to be working with the authorities such as Bengaluru Railway Division, which
recognised the importance of shared mobility services and enabled us further to provide
accessible mobility. This is happening for the first time ever in the country. We are positive
that it’ll help lakhs of railway commuters with their first and last-mile commute.”

Through the partnership with the Bengaluru Railway Division, Bounce plans to introduce 698
scooters at 13 Bengaluru railway stations. Bounce scooters will make their debut at places
such as Bellandur, Yelahanka, Banaswadi, Whitefield, Yeshwanthpur and Kengeri.

Parking lots have been allotted at two entrances in each of these stations to pick up or drop
off Bounce bikes. By providing bike service from the premise of railway stations, Bounce
said it aims to improve connectivity and encourage citizens to use railway services.

Integration of hired, shared and public transport services will ensure all modes of commute
complement each other and provide a seamless experience to citizens. Since the last two
years, there has been a significant increase in the number of people using the suburban rail
service. It is particularly popular among office-goers looking to avoid traffic.

This year, 1.5 lakh passengers opted to travel by the South Western Railway’s intracity trains,
an increase from 1.4 lakh passengers in 2016-17. According to a recent proposal by Rail
India Technical and Economic Service (Rites), suburban trains are projected to have a total
daily ridership of 9.28 lakh in 2025. At a time when hours spent commuting has gone up

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because of traffic congestion, Bounce feels suburban railway acts as a cheap and fast
alternative for the long commute.

However, the first and last-mile connectivity is still a critical issue. In Bengaluru, railways
see lakhs of people coming in or going out of the city from various stations. The city’s
fragmented transport system and evolving public transport impact a sizable number of these
travellers. A recent survey showed that 70 per cent of citizens in Bengaluru felt the need for
improving first and last-mile connectivity.

Bounce, which was recently valued at $500 million in a funding round, is scaling on a par
with global players, including US-based scooter rental companies Lime and Bird. The
company has already partnered three Mass Rapid Transport systems – Namma Metro,
Hyderabad Metro and Nagpur Metro. Within a year, 42 per cent of Bounce rides either
originated or culminated at Namma Metro; around 40,000 of the nearly one lakh daily rides
undertaken have been metro commuters.

The company operates in Bengaluru with 13,000 dock less scooters and has a presence in
over 35 cities in the rental and docked model. The start-up’s app allows the users to pick up a
scooter and drop it at any legitimate parking spot. The bikes are enabled with the latest tech
solutions like Bluetooth helmets, tilt and tow sensors. They also have features like global
positioning system (GPS) tagging, geo-fencing and sensors that alert the team in case of a
crash or battery tampering.

BS: Fri, December 27 2019.

Carmakers Eye Subscription, Leasing To Offset Dwindling Dealership Sales
These new business models have been driven by the changing dynamics of transportation and
vehicle owne. Car-makers, struggling with one of the longest slowdowns in decades, are
driving an alternative revenue stream to counter falling sales from dealerships: Subscription,
leasing and shared mobility solutions.

In 2018, Maruti Suzuki, the country’s largest car manufacturer, reported a 71 per cent growth
in leasing, and Hyundai’s subscription business grew nearly six times since it launched in
March 2019. Mahindra, Toyota and Skoda have also announced plans for a subscription-
based ownership model. Japanese major Nissan is expected to launch Nissan Intelligent
Ownership for its new model Kicks in the next few weeks. Volkswagen India’s first lot of
Polo cars, of 200 vehicles, were completely subscribed within 48 hours of the announcement
July 8, 2019.

These new business models have been driven by the changing dynamics of transportation and
vehicle ownership. Unlike the car manufacturers, aggregators such as Ola and Uber and self-
drive rental companies such as Zoomcar, Revv and others have reported good growth on the
back of shared mobility, subscriptions and rentals and similar mobility solutions. Zoomcar,
for instance, plans to expand its fleet size to around 1,00,000 vehicles from 7,000 vehicles in

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three years. Revv operates above 3,300 cars and wants to expand to 10,000-plus over the
year. Hyundai and Kia Motors jointly have invested $300 million in Ola, and Hyundai has
invested around Rs 100 crore in Revv separately.

“We believe that owing to disruption in the industry, new business models are becoming
more customer-centric. Products such as subscription are picking up strongly as an alternative
of ownership model,” says Vikas Jain, Hyundai’s national head for sales. The subscription
model offers a degree of ownership flexibility that is not available through the conventional
dealership route. It offers consumers one way of driving a brand-new car of choice without
actually having to go through the hassles of ownership, including down-payments and road
tax. After a lock-in period, the consumer has the option of using it for as long as she wants,
paying a monthly fee with an anytime opt-out clause. If she wants to own the car, she can buy
it at a pre-determined settlement charge (used cars are put into the shared mobility or second-
hand markets).

The business is still small: Subscription accounts for one per cent of industry volume today,
but is expected to rise to 10 per cent in five years. Hyundai's subscription business is already
accounting for 200 vehicles a month and expects to cross 250 in the coming months. In May
2019, the Korean auto-major also forayed into the leasing business, where Maruti has been a
frontrunner. Maruti leased over 6,700 units in 2018-19, though this is still one per cent of the
top-line. “As the market matures, we expect leasing to become a substantial contributor in
overall vehicle demand. It is convenient for companies who wish to offer vehicles to their
employees and has tax benefits,” says Shashank Srivastava, Executive Director, Marketing &
Sales, Maruti Suzuki India.

Shared mobility is the other high-potential business for car makers. It has grown from $900
million in 2016 to $1.5 billion in 2018 and expects to increase to $2 billion by 2020. There
are currently 15,000 cars under the car-sharing ecosystem, and this number is to rise to
50,000 by 2020, and 150,000 by 2022, according to Hyundai Motor. Hyundai’s partnership
will offer Ola drivers various financial services, including lease and instalment payments,
vehicle maintenance and repair services. The trio of Hyundai, Kia and Ola have also agreed
to coordinate efforts to develop cars and specifications that reflect the needs of the ride-
hailing market.

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What’s driving this new business is that that ownership as a method for accessing an asset is
losing grounds across asset types (cars, homes, furniture). Urban youth today demand
solutions that are high on flexibility and pay-as-you-go. So, carmakers know that this new
sales channel will become meaningful soon enough. As Anupam Jain and Karan Agarwal,
Co-Founders of Revv, point out, “These solutions are inducting cars into the daily lifestyle of
a very large
population of
people who
otherwise would
have waited for
another one or two
decades to
accumulate
sufficient wealth to
buy their first car.”

How does the ownership work out compared with lifetime ownership? It is hard to compare.
For example, if a customer wants to drive a Hyundai Grand i10 for 48 months, the monthly
expenses under subscription is Rs 15,650 per month against Rs 14,835 a month under a car
loan. But subscriptions involve no upfront expense, whereas buyers need to pay Rs 28,291
upfront in the case of a car loan. Insurance and routine maintenance, which comes to about
Rs 3,790 a month, is also the company’s responsibility.

The biggest advantage is flexibility — the customer can use the car for any period of time
and return it whenever she wants. Another benefit is convenience — repairs and so on are
also the company’s responsibility. If the subscription is for a long period (36-48 months), the
cost is roughly similar to buying a car, with the added advantages of flexibility and
convenience, say Revv founders. The consumer benefits in the leasing business are less clear-
cut. Vinay Raghunath, partner, Auto Sector Performance Improvement, EY India, says in
terms of leasing, most consumers choose to buy through their employers, which gives the
company the higher benefit of interest write-off and depreciation, the only benefit to the non-
corporate consumer is zero down-payment. But low awareness remains a challenge, which
suggests that car companies need to reorient their marketing strategies too.

BS: Mon, August 12 2019.

These Siblings Have Been Riding The Global Highway With Their Auto
Portal

Starting off from a tiny office in Jaipur ten years ago, CarDekho is just a few steps away from
earning the unicorn tag.

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  Automobile dealers look for strategies to revive sales, arrest job losses
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Some 10 years ago, two young IITians visited the AutoExpo in New Delhi. And the insights
they got there promoted them to launch an auto-industry focussed portal from their single-
room set up in Rajasthan’s Jaipur. All that they had at that point, apart from that small
working space, were two laptops.

Cut to 2019. CarDekho, the portal they had launched has not only established itself as a
leading automobile marketplace with a valuation of around $600 million, it is steadily making
inroads to global markets as well. The company’s latest funding of $70 million announced
last week was led by China-based Ping An’s Global Voyager Fund and Sunley House Capital
Management, which is a subsidiary of global private equity firm Advent International. The
company’s existing investors also participated in the round.

Despite the slowdown in automobile sales, CarDekho’s new auto business segment posted 30
per cent growth in the first half of FY20 while its insurance and warranty business grew more
than fivefold over H1 of FY19. Likewise, the company’s used-car and financial services
businesses have grown by a staggering 120 per cent and 135 per cent, respectively.

In fact, the Jaipur-headquartered company now claims that 15-30 per cent of some of its
partner manufacturers’ annual sales are driven by its platform. It also actively works with
over 4,000 new auto dealers and 3,000 used-car dealers across India, influencing more than
42 per cent of their retail sales on its counter. In addition, CarDekho works in collaboration
with more than 10 financial institutions and 18 insurers across the country to facilitate used-
car financing and insurance.

So, what is unique about this start-up? Amit Jain, CEO and Co-founder, CarDekho, attributes
the success to the company’s unique automobile ecosystem. This helps in delivering
compelling value propositions to the customers by engaging with them, leveraging the
various transaction models on a single platform. One of the features, he says, is to provide the
user with an “immersive” experience of the car model on the platform before he visits a
dealer showroom. This is important as today around 90 per cent of the customers’ research
online before they walk into a physical showroom.

Another feature that CarDekho offers is a “Feel the Car” tool that provides a 360-degree
interior/exterior view along with the sounds of the car, explanations of various features on
video, in addition to the regular search and comparison option by make, model and price,
with live offers and promotions thrown in. The platform also has used-car classifieds wherein
users can upload details about the vehicles they want to sell. If they are buying, they can find
used cars on offer from individuals and dealers, and can also access the platform's inspection
services.

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CarDekho.com also provides array of tech-enabled tools to OEMs and car dealers. These
include apps for the sales executives at dealers to manage leads, cloud services for tracking
sales performance, call tracker solution, digital marketing support, virtual online showroom
and an outsourced lead management operational process, all of which play a huge role in
converting a casual enquiry into sales. “Our vision is to construct a complete ecosystem for
consumers, car manufacturers, dealers and related businesses so that they not just buy and sell
cars with the greatest possible ease, but can also manage their entire ownership experience,
be it accessories, tyres, batteries, insurance or roadside assistance,” say the founders.

In 2007, after nearly eight years of working with Texas-based Trilogy, Amit Jain, a graduate
from Indian Institute of Technology (IIT) Delhi, abruptly quit his job and returned to Jaipur.
He dabbled in his father’s gemstone business for a while after the latter’s demise, along with
his younger sibling Anurag Jain, also an alumnus of IIT Delhi.

After six months of dabbling in the gemstone business, the brothers decided to try out
something in another field where they could apply their domain expertise, and set up Girnar
Software. Apart from CarDekho.com, Girnar Software owns and operates BikeDekho.com
and PriceDekho.com.

According to Amit, the duo started the journey sometime in 2007, establishing around ten
portals in just two years. "I’m essentially a coder with good at SEO and social media skills. I
leveraged these to get traffic to the sites. Some of the portals showed traction, others failed.
CarDekho performed the best, thus we zeroed in on that. By 2010, we started getting noticed
by investors," he said.

The company has attracted some of the best-known investors in the market including Google
Capital, Tybourne Capital Management, Hillhouse Capital, Sequoia, HDFC Bank, Ratan Tata
and Times Internet, among others. With the latest round, CarDekho has so far raised over
$250 million so far. "With the latest fund raise, we will continue to strengthen our domestic
and international businesses and will aggressively work towards becoming the largest
personal mobility ecosystem in the country,” said Amit.

The company will use the money to strengthen its transaction businesses and expand its
international footprint. It recently started operations in Southeast Asia by acquiring the
Philippines business of Carmudi, a leading new-auto player. It has been in Indonesia since
2016 under the brand name OTO.com and has since become the number one New Auto portal
in that country.

Shailesh Lakhani, an investment advisor from Sequoia, an early investor in CarDekho, recalls
how he was feeling a little nervous after the first board meeting that was attended by just
three people -- him a d the two founders. The glaring concern then was the inadequacy of a
team that would make the business work. The founders took permission from the investor to
spend the funds they had raised in that round, which was meant for three years, in a single
year in order to push marketing activities. Lakhani says CarDekho was the first in its segment

Veena Kumar 9
to conduct a mass-media campaign. Things went as planned. And years after that, Lakhani
recalls how the board meeting shifted to a larger room when managers handling different
businesses were given 10-minute slots to present updates on the business. In the current
fiscal, CarDekho is looking at doubling its revenue to Rs 520 crore.

The CarDekho group is one of India's leading auto tech companies with platforms such as
CarDekho.com, Gaadi.com, ZigWheels.com, BikeDekho.com and PowerDrift.com. In 2013,
the company also acquired Gaadi.com, another automotive company. Recently, it launched
an insurance platform called InsuranceDekho.com that offers services in the motor and health
insurance spaces. CarDekho Gaadi store, a retail auction model for pre-owned cars, recently
launched seven stores in Mumbai. The opening of these stores is a part of CarDekho's plan to
establish 200 Gaadi stores across India by 2020.

Business Standard: December 10 2019.

Cardekho Closes $70 Mn Funding Round From Top Investors In China,

Europe

CarDekho said it will use the money to strengthen its transaction businesses and expand its
international footprint

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CarDekho, an auto-tech company, has raised $70 million in a Series D round, led by Ping
An’s Global Voyager Fund, which has made its first investment in India with this deal.
Sunley House Capital Management, a subsidiary of global private equity firm Advent
International, and existing investors -- Sequoia India and Hillhouse -- were other investors.
With the latest round, CarDekho has raised more than $250 million till date.

Based in China, Ping An is one of the world’s largest financial services companies and

holds a majority stake in its home country's largest auto portal, Auto home. Sequoia India is
one of the early investors in CarDekho, having led the Series A round in 2013.

The company said it will use the money to strengthen its transaction businesses and expand
its international footprint. CarDekho recently started its operations in the second country in
Southeast Asia by acquiring the Philippines operations of Carmudi. The first was Indonesia,
where it started operations in 2016 under the brand name OTO.com, which has since become
the number one new auto portal in the country.

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The company claims all car and motorcycle manufacturers engage with CarDekho and that it
accounts for 15-30 per cent of some of its partners' sales. CarDekho also works actively with
over 4,000 new auto dealerships and 3,000 used car dealers across India, influencing more
than 42 per cent of the retail sales happening through their counters. In addition, it works in
collaboration with more than 10 financial institutions and 18 insurance companies across the
country to facilitate used-car financing and insurance to provide a seamless experience for
both buyers and sellers.

The company recently announced its H1 results for 2019-20. The overall revenue of the
company achieved a YoY growth of 92 per cent over the first half of the last fiscal year and
stood at $28 million. Despite the slowdown in new auto sales across India, the company’s
new auto business segment posted a significant growth at 30 per cent. Its insurance and
warranty business grew 525 per cent. The used-car and financial services businesses grew by
120 per cent and 135 per cent, respectively.

“With the latest fundraise, we will continue to strengthen our domestic and international
businesses and will aggressively work towards becoming the largest personal mobility
ecosystem in the country,” said Amit Jain, CEO and co-founder, CarDekho.

“Auto services are a core component of Ping An’s ‘finance + ecosystem’ strategy, reflected
in our majority shareholding in Auto home in China. We have been extremely impressed with
the business CarDekho has built in India, particularly its success in developing different types
of financial services offerings to address car buyers’ needs,” said Donald Lacey, Managing
Director and COO of the Ping An Global Voyager Fund. “The Global Voyager Fund’s stake
in CarDekho represents Ping An’s first venture investment in India, and we are delighted to
partner with an organisation of CarDekho’s caliber.” The Rainmaker Group acted as the sole
financial advisor to the company.

Business Standard: December 05 2019.

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