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According to Indian tech publication The Next Big What, the deal will see the Ibibo group shelling out US$135-million for RedBus parent company Pilani Soft Labs.
Under the terms of the deal, RedBus will apparently continue to exist “independently” with its existing management team and as a separate business to Ibibo’s string of companies which includes the likes of Goibibo.com, PayU.in and Tradus.com.
RedBus, which was founded in 2006 has grown rapidly to claim a prominent place in India’s burgeoning online ticketing market. The company claims that it has the largest network of bus operators in its list and that sells a million tickets a month, aggregating 228 000 seats a day.
Co-founded by Phanindra Sama, RedBus started as a company of just three people and now has over 600 employees across India.
“We are excited to be a part of Ibibo Group,” said Sama in a statement. “Naspers’ strong belief in Internet industry and operating experience in multiple countries will help redBus grow into a renowned brand in the coming years.”
According to Ibibo head honcho Ashish Kashyap, the motivation for buying RedBus was down to the founding team, its strong position in the market and the growth potential.
“Online penetration of the bus market is only 5.7% compared to 28% for air travel, suggesting headroom for rapid future growth,” Kashyap added.
Naspers (through) Ibibo is a relatively early player in the Indian online space, with Amazon and eBay having only recently set up properties in the country, and is therefore at the crest of a wave that looks set to break in a big way.
While a relatively small portion of the Indian population is online (around 11.4%), the sheer size of that population still means that it amounts to massive number of people.
As internet penetration increases, bringing economic growth along with it, the spending power of that population will grow too. But the gap during which foreign companies can make easy, but still lucrative investments in the country will likely be fairly small one and Naspers, has its food wedged firmly in the door.