Raftaar Technologies, the parent company of Mumbai-based bus aggregator Limo, on Tuesday announced raising $1 million in funding from Rainmaker Ventures. Launched in December 2015, this marks the venture fund’s first investment.
This is the second investment for Limo, which was earlier called rBus. In August 2015, rBus received seed funding from India Quotient, People Group founder Anupam Mittal, and other investors, to expand operations as well as strengthen its technology platform.
Commenting on the investment, Siddharth Sharma, co-Founder, Raftaar Technologies said, "At Limo, we were clear that we wanted to create a bus service that would be as comfortable and convenient as your car, but at a fraction of the cost. We have completed more than 3 lakh rides since inception. We're very excited that visionary investors Rainmaker Ventures are backing our vision of better and more effective mobility for everyone."
When asked about his future plans, Siddharth told YourStory:
We work with everyone from individuals and communities to large corporates, corporate parks, and even governments, and have a number of conversations ongoing in this regard and expect to be very busy rolling out and scaling these networks. Transit has traditionally suffered from very poor margins, but we believe new technology and techniques can usher a paradigm shift in this space. So we also expect to be working on some exciting innovations in this space. As we are a platform, we expect that we can scale very rapidly from here. Based on our current pipeline, we should be set for more than 20x growth in the next fiscal.
Founded in 2015 by Siddharth Sharma, Anshul Khandelwal, and Vivek Choksi, Limo is a bus service enabling individuals, communities, corporates and governments to deploy mass transit infrastructure. When last reported, Limo had buses running on 12 different routes in Mumbai and commuters can pick a route and timing for their travel.
In October last year, Limo was reported to have served more than 54000 rides then.
Explaining the investment, Atul Hegde, Co-Founder, Rainmaker Venture added
“At Rainmaker Ventures, we are looking at investing in ideas that will culminate into sustainable businesses. Mass transit is one of the most crucial aspects of daily city travel. Not only does this segment have tremendous growth potential, it is immensely scalable. We feel that given the scope of the bus-services industry and its need, this is something we want to nurture and take to another level.”
With a presence in India, the US, Brazil, and Singapore, Rainmaker Ventures is an early-stage startup seed fund of $50 million that aims at investing in tech startups. The venture fund is also looking to hire more senior professionals from varied sectors for providing mentorship to their portfolio companies.
The bus aggregator market still seems to be tangled in regulations. While the Delhi government has legalised bus aggregators with effect from today, other geographies are still not unsure on the regulations.
Commissioner for Transport and Secretary State Transport Authority Karnataka, HG Kumar emphasises that bus aggregators following a BMTC-like transport system are illegal in Bengaluru.
Despite these restrictions, there are still players functioning in this space. Ola Shuttle currently services 100 routes across Delhi-NCR, and ferries over 10,000 consumers daily. The company has over 500 shuttles on its platform. Shuttl claims to have completed one million rides across Delhi-NCR in just 194 days.
It was earlier reported that Commut in Hyderabad receives 250 requests per day and operates in 12 areas of Hyderabad with a fleet of 17 buses. There is ZipGo as well operating in Bengaluru and Delhi-NCR.
But, if allowed, there is immense scope for these aggregators in the market. With multinationals scaling down their transportation cab services for employees (because of operational costs), B2B could be a big segment for these players to tap into.
However, one cannot deny that the growth and future of the transit industry is still a bit dependent on government policy and regulations.