A tale of 2 Youngturks: Ibibo.com acquires redBus.in

Two Young Turks that shot to fame in 2008 are yet again in the news for all the right reasons. Phanindra Sama, chief executive officer, redBus, a Bangalore-based online bus ticketing portal is being bought by Ashish Kashyap's company ibibo.com.

South Africa media powerhouse Naspers Indian arm ibibo has acquired redBus, the deal was announced on Friday, but the valuation has not been disclosed.

For sometime now redBus has been described as one of India's hottest startup stories and from 2006 to now it has been a journey of a lifetime for three software engineers Phanindra Sama, Charan Padmaraju, and Sudhakar Pasupunuri who wanted to computerise online bus ticketing. Below is the edited transcript of Sama and Kashyap’s interview to CNBC-TV18 Q: Let me start with you Phani, congratulations on this deal, it is a big day for you. Tell me what were the last couple of days like? What were you thinking about before you actually inked this deal and what made you make up your mind on finally wanting to sellout? Sama: We were doing a fund raise, so we pitched to a couple of PEs/VCs and we gathered good interest in the midst of all that we got this interest too and when we evaluated it from all perspectives it appears like the right thing to do right now and we took up the deal and took it to closure. Q: What was the deciding factor Phani and what made you want to sellout at this point in time. Things have been going great for redBus, was it getting hard to run a standalone internet business, was that why you decided to take this decision? Sama: These are not the reasons why we are exiting because even after the deal is done we continue to run the business as we have been running. I continue to be the CEO, so there is no running away from it, which shows that, that is not the reason why we are exiting the business. Q: Phani, redBus had been described as one of India’s hottest startup internet stories. It has been an extremely successful play in the bus ticketing niche category, were there other suitors who pursued you and what weighed the scales in favour of ibibo finally? Sama: What was attractive about the deal is the group itself. They have various companies even within India like Gaadi, Goibibo etc. and all that and all those companies continue to run independent by their own founding teams and that is one thing that impressed us. We said that this way we will continue to run as Pilani Soft Labs, as redBus like we have been doing all this while, that is one of the most attractive things in the deal. Q: Let us get in a word from the acquirer Ashish Kashyap of ibibo, same question that I asked Phani. What attracted you to redBus? It has been described as one of the best internet startups stories over the last couple of years. What was it about redBus that you thought was so compelling? Kashyap: Given that ibiboGroup already is building out its various other travel businesses like the Goibibo business, which is one of the leading online travel aggregators (OTAs) and also TravelBoutiqueOnline, which is another B2B aggregators, we realise that by combining the volumes of these businesses we would become one of the biggest online travel businesses in the country. Q: Phani, redBus has partnerships and powers bus ticket booking for via.com, yatra.com, among others. Will this partnership continue to exits or will redBus now exclusively power Goibibo? Sama: No, not all. We continue to power, MakeMyTrip, via, Goibibo, all the partners that we have it is very clear on all of our minds that we continue to execute the business strategies like we have been doing and specifically on the API front none of these partnerships will be cut off. Q: Let me ask you what will ibibo bring to the table? How do you plan to grow redBus? What kind of growth potential do you really expect for this particular business? Kashyap: If you look at ibiboGroup it has become a platform for entrepreneurs to create and not just create and get traction, but also massively scale. We build those competencies in our ecosystem. So while we keep each of these businesses very independently focused and every CEO and entrepreneur is chasing his or her KPIs and business plans. On the parallel to this, we have created huge competencies to create scale and really go deep into each other markets. So, we will bring a lot of know-how both from ibiboGroup and from our parents Naspers, which owns many successful assets across the world. So, we would like to transfer a lot of know-how to redBus, so that it gets into the next gear of its journey and further scales. Q: What has been the response from your investors Phani? And you had a whole bunch of them investing in the company? Was there pressure from them to cash out? Was that part of why you decided to take the decision at this point? Sama: There were no pressures from anybody to do the deal. It is a very happy situation and all through our lives we have been happy, when we started we were happy, when we raised the capital our investors were happy, when you are giving them exit ofcourse they are happy. We also wanted the incoming investors, the incoming company which is acquiring us to be happy and certainly they are also happy. So, all that goes well is a happy thing for everyone. Q: You will continue as the CEO of redBus, but you have got a lot of cash now and perhaps some mind space as well. You are going to be looking at investing all of that in perhaps another venture and about the redBus’ future? How exciting does it look after this deal? Sama: Right now within India there is huge potential, there are so many government agencies (not sure), which are very large and they don’t have technologies and some of them who have technologies - they are facing scaling problems. I think that way we have a unique opportunity where we can build our technologies and provide it to these operators, which will build our overall scope of operations. For us to do all these it will take many more years, we have our hands full. After all this is done, we would as a natural course of things we will explore opportunities outside India.