‘Uber for buses’ startup thrives in India’s chaos, gets funding from IDG Ventures

Welcome to Mumbai! (Photo by Marc van der Chijs)

Traveling for work in India? Chances are you want to miss the bus. Thanks to overcrowding, irregular bus schedules, and traffic jams, the commute is often a rough ride and sometimes a nightmare.

Cityflo – an Uber for buses – has jumped in to sort out this mess. It arrived in Mumbai in September, offering an easy way to travel to work by allowing users to book seats on buses through an Android app. And now it has stepped on the gas.

The startup today announced US$750,000 in a seed funding round – led by venture capital firm IDG Ventures – that will not only help it expand in Mumbai but also branch out to other Indian cities.

Jerin Venad, co-founder and CEO, said, “Urban transportation is a billion dollar problem to solve. In just nine weeks since our launch, we’ve received an overwhelming response from our customers with a customer repeat rate of over 75 percent.”

Stepping on the gas

The fresh funds will be directed towards greater penetration in Mumbai. They also plan to expand to other cities in the next three months.

“While tier-one cities like Delhi have a huge population and, therefore, great potential, tier-two cities like Ahmedabad too hold a lot of promise because they simply don’t have adequate public transport. We are still evaluating the market,” Jerin told Tech in Asia.

Cityflo runs 65 buses with the help of some of Mumbai’s biggest bus operators. Connecting office hubs like the Bandra Kurla Complex and Andheri to popular residential areas, it already boasts of 2,200 customer rides every day.

But that’s just the tip of the iceberg. Mumbai has millions of road commuters.

Around 70 million people use around 150,000 buses every day, but it still leaves people clamoring for more.

Too many cars

Be it Delhi, Chennai or Bengaluru, the road to public transport in Indian cities is full of potholes. People would do anything to be spared that sweaty, dusty, and sometimes rickety ride to work. The number of private cars has been multiplying due to the lack of adequate public transport options.

Online or mobile-app based startups have begun to seize the opportunity.

While Shuttl operates in Gurgaon, Zipgo has stepped into Bangalore. Like Cityflo, Rbus operates in Mumbai. On-demand cab provider Ola too is reportedly preparing to launch a bus service

So what made IDG Ventures – a leading India-focused technology venture capital fund – bet on Cityflo?