Busbud, a Montréal-based travel startup specializing in intercity bus tickets, has raised a $15 million Series C round of financing, bringing the startup’s total funding to date to $40 million CAD.
“This fundraising shows the resilience of the leadership team and the continued high-growth potential of the business.”
The Series C round was led by the Canadian Business Growth Fund (CBGF) and Investissement Québec. New investors include Export Development Canada through its investment matching program, the Business Development Bank of Canada (BDC) and Singapore-based K3 Ventures. Existing investors Inovia Capital, Plaza Ventures, and Claridge also participated.
Busbud acts as a ticket reseller, and also provides support on the bus tickets that are sold through its platform. The startup services 21,000 cities with over 2.3 million bus routes in 80 countries. The new funding will be used to fuel Busbud’s technology development, grow the team by 14 people, and accelerate geographic expansion.
Busbud, which raised a $14 million Series B round in 2018, has felt the widespread impact of COVID-19 on the travel sector. The company’s revenue growth reached 110 percent year-over-year prior to the pandemic. Busbud declined to disclose its current revenues to BetaKit, but noted it has seen week-over-week increases in ticket sales volume in the last 12 weeks.
Like many other companies, when COVID-19 hit, Busbud had to make internal changes to adjust to the new reality. In April, the company laid off 16 employees, reportedly one-third of its staff, as demand for its service stalled when travel was halted globally due to public health restrictions.
Busbud confirmed to BetaKit the layoffs impacted mostly its customer support and partnerships teams. The startup has since re-hired two employees and told BetaKit additional re-hires will be evaluated on a case-by-case basis. The 14 additional hires following the Series C raise will be in mostly engineering, product, and marketing roles.
“Busbud was directly impacted by COVID-19, but the company had already been planning to raise its Series C round in 2020 to continue our geographic expansion and product development, following our Series B round in 2018,” Busbud CEO and co-founder LP Maurice told BetaKit.
The travel tech industry, in general, has suffered an undeniable blow amid the COVID-19 pandemic. Bus.com, another Montréal-based startup that offers an online platform for bus rentals, told BetaKit in April it was using government programs to keep its employees on the payroll. Companies like Sonder and Hopper also conducted mass layoffs during the crisis, though, like Busbud, have since raised financing rounds.
“This is obviously a challenging macro environment for the travel industry, but this fundraising shows the resilience of the leadership team and the continued high-growth potential of the business,” said Magaly Charbonneau, partner at Inovia, regarding Busbud’s Series C.
Despite challenges, Busbud has adapted its core offering during the pandemic. The CEO told BetaKit that Busbud has broadened the modes of ground transportation aggregated on the platform to include trains, carpooling, ride-sharing, and car rentals. The startup has also added new functionalities to its platform, including cancellation insurance and a feature that displays informational messages to travellers, such as schedule changes or COVID-19-related health measures.
“We continue full speed ahead on our quest to make sense of this huge and fragmented intercity bus travel market, which boasts more passengers than air travel, while being widely overlooked by the travel industry,” said Maurice. “We’ve built deep expertise integrating with bus back-end systems around the world. Working together with our bus industry partners, we believe we can keep translating this expertise into a delightful experience for bus travellers worldwide.”
As part of the Series C financing, Hai Tran-Viet, senior investor at CBGF, will join Busbud’s board of directors. Busbud’s board also includes Erik Blachford, former CEO of Expedia, and Philippe Vimard, CTO of Doctolib, a booking platform for doctors in Europe.
Image courtesy Busbud.