In FY 2012, redBus grew its top line 3x, touching a turnover of Rs. 350 crore and in the process registered its first profitable year

S. PREM KUMAR

When the magazine, Fast Company released its World’s 50 Most Innovative Companies 2012 list, No. 48 on that list was redBus. According to the magazine, redBus made it to the list for one simple reason: computerising the bus industry, one that is traditionally tech-and-risk-averse. Getting on this list is no mean achievement. After all, Apple, Facebook and Google lead the list at the top three spots. Late last month, we got in touch with Phanindra Sama, founder of Pilani Soft Labs, the parent company that owns redBus. Sama gave us the key updates at the company since we last spoke to him in May 2011.

In FY 2012, the company touched a top line of Rs. 350 crore, up 300 per cent from Rs. 116 crore in FY2011. “It is the fastest we’ve grown in recent times and it obviously means a whole lot of changes on the operations front,” says Sama. Today, the company runs 26 offices around the country including operations in a number of Tier II cities. Over the last year, redBus also started servicing government-owned operators in Goa, Rajasthan and Bihar. BOSS and Seat Seller, two software products that were sold to and used by bus operators transitioned from being a software product to a software platform. The company has also revamped its website to manage ‘big data’ – a buzzword in the world of startups today – which essentially means the company now captures and analyses data from hundreds of events that happen on redBus.in every second, and uses this information to make better decisions in terms of product, marketing and sales.

“It is the fastest we’ve grown in recent times and it obviously means a whole lot of changes on the operations front.”

Founded in 2006 by Sama, Sudhakar Pasupunuri and Charan Padmaraju, to solve a problem they encountered, redBus has gone on to make its mark on the whole bus industry. For example, Goa-based state transport operator, Kadamba Transport Corporation, might just be crafting a turnaround thanks to redBus by computerising its ticket sales process. In March 2011, when the state-owned operator implemented BOSS and launched its own online bus ticketing website, ticket sales started growing. On select inter-state routes, like the one between Bengaluru and Goa, the operator even started reporting an operating profit. For Kadamba, which used to report a loss of approximately Rs. 2 crore every month, this computerisation and usage of the Internet turned out to be crucial. Sama says, “In some way, this story prompted us to start selling to other state-owned operators.” As of now, the company works with over 1003 bus operators across the country and has sold over one crore bus tickets.

The other fairly big change at the company revolves around its leadership team. The company hired Bharat Singh, a former GE Capital executive as its CFO and Satish Gidugu as its CTO. “Today, my role is vastly different from what it was. I focus on looking at the key metrics of the business and not so much on day-to-day operations,” says Sama.

On the operations front, Pilani Soft Labs is still conducting a few experiments, one such being a new booking option called ‘instabooking’ for its customers. It is exploring its ability to deliver a ticket within two hours. For this, the company wants to position one delivery boy for every six km radius and equip each one of them with a portable printer so that tickets can be printed, on the spot, from a mobile phone with 3G Internet connection. For a company that managed to revamp the whole bus operator industry, this shouldn’t be too hard a problem to solve.

GROWTH DRIVERS

• The business model works because its products are tremendously useful to both bus operators and users (people who book bus tickets)
• The company’s growth has been largely driven by word of mouth
• redBus has computerised a traditionally non-tech savvy industry

THEN AND NOW