Why these Indian entrepreneurs hit the road with an online bus ticketing startup in ChileSindhu Kashyap
PajaseBus is a Chile-based online bus ticketing and distribution platform for bus operators. The SaaS platform can also distribute seat inventory across online and offline agents.
At a glance:
Founded in: 2011
Founders: Amit Sodhani and Dasharatham Bitla
Where it is located: Chile
Sector: Online bus ticketing
When Amit Sodhani moved to Chile to support the investment banking division of Deutsche Bank, he realised the South American country had several similar travel-related problems as India.
Travelling around the country with his wife, he saw bus operators in Chile had several price discrepancies, just like in India, without fundamental differences. Amit, who was always keen on starting on a venture, started travelling extensively across the country to understand the root cause of the issue.
Not long after, he decided to start PajaseBus with his friend and colleague Dasharatham Bitla. The platform is now one of Chile’s biggest intercity online bus ticketing platforms and a global distribution system for the supplier.
A tough market
However, the initial days were tough as the bus operators weren’t willing to try PasajeBus technology. It was tough for Amit to break through and he struggled to create a niche in a Spanish-speaking market.
There was also a lack of tech advancement in the intercity bus ticketing industry and poor tech awareness. PajaseBus is an inbuilt API/WebService-enabled SaaS platform, which could help bus operators connect to online sales instantly and also has the ability to distribute their seat inventory across multiple agents (online and offline).
The SaaS solution was five years ahead of any other solution available in the market. Apart from helping operators connect for online sales, the system also improved their operational efficiency.
Initially, it was incredibly tough to convince the operators to use the advanced SaaS solution and try the potential of online sales. PasajeBus assured and guaranteed the first three operators of multiplying their sales by 60 percent with 16 months of working with the Company; or else, the operators would not have to pay anything for the work done.
“The first three clients grew by 2.5X within 12 months of working with the PasajeBus.com. That helped a lot on the recommendation side to get new clients,” Amit says.
On-boarding the advisory board
Dasharatham had helped Amit further improve on research and create a strong go-to-market strategy.
The duo was helped by Redbus Co-founder Phanindra Sama’s recommendation on the business proposal, further helped both the founders connect on the business ground.
After multiple attempts at various incubators, PasajeBus was finally selected by Microsoft Imagine Business Lab for $100,000 funding plus additional benefits. Soon after this, Amit convinced Latin America CEO of DHL Global Forwarding Alberto Oltra to join the company as an investor plus advisor.
PasajeBus was selected as the top-performing startup from Microsoft Imagine Business Lab and was later “accelerated” by Startup Chile.
Setting up the team was the biggest initial challenge for the founders, but the best part was that both of them were in sync on this.
“The first two years were incredibly tough and PasajeBus witnessed a very high attrition rate, mainly due to wrong hiring. Things started improving with mentorship from Alberto and local angel investors, who personally guided and helped in the hiring process,” Amit says.
The B2C ecommerce market in Chile is expected to touch $8 billion. The Founder of Reservamos, a Mexican travel booking site, Sebastian Gomez, stated in the publication Skift that bus travel is to Latin America what airlines are to the US.
The global market for the intercity and shuttle bus travel is pegged at $74.7 billion. In 2016, redBus also acquired Peru-based platform, Busportal. Apart from this, there also is another Chilean startup Recorrido, which has more than 30 bus companies.
Currently, PasajeBus works with over 50 bus operators in Chile and Argentina, which cover over 90 percent travel destination choice in Chile and over 40 percent in Argentina. PasajeBus charge between five to 10 percent, plus VAT commission to the bus operators for every ticket sold online.
“Our Global Distribution system works on revenue sharing model and earns net 0.4-2 percent commission from every ticket sold through agency network,” Amit. The SaaS system earns between $200 and $2000 depending on the size of a client.
PasajeBus directly or through strategic tie-up controls over 40 percent online inventory distribution rights in Chile. The platform offers services in four LATAM countries but the company is mainly focused on the Chile and Argentina markets. PasajeBus is evaluating some M&A possibilities across LATAM to fuel faster growth.
“We don’t need further funding immediately since the company is already reporting profit and growing sustainably. On the financial side, PasajeBus is targeting an $40 million turnover by the end of 2019,” Amit says.