Cradle Fund recipient aims for RM1bil M'sia-Singapore intercity bus market
Founders offer advice on when is best time to engage with VCs
IT may not be targeting a sexy market opportunity, but CatchThatBus has shown that there are opportunities in everyday life experiences – if you only look hard enough or just open your eyes to the flow of life around you.
Founders Ashwin Jeyapalasingam and Viren Doshi decided to tackle the inconvenience of purchasing bus tickets by building an online bus ticketing platform, with a focus on mobile. This was back in June 2011.
The idea did not come to Viren in Malaysia, but earlier in India where he was working with an NGO (non-governmental organisation). Prior to this he had a stint with a multinational and was helping out in the family business. Ashwin was an associate director in the consulting arm at PricewaterhouseCoopers before leaving to be the co-founder and COO.
In September 2013, when they were first featured on DNA having just gone live with three bus operators, they were even confident of selling ancillary services too, going so far as to declare their model as being “the AirAsia model.”
Currently with 11 bus operators using their ticketing platform, the business model is commission based with actual commission depending on price of ticket and terms agreed with each operator. Tickets are sold at the same price as the counter with no additional fees incurred by passengers buying via CatchThatBus.
On May 28, they hit a major milestone with the announcement that they had raised an undisclosed sum from investors – huge validation that there is indeed a US$310-million (RM1-billion) market opportunity here - and that the startup they launched almost three years ago is well-positioned to capture that opportunity.
While the duo decline to reveal the amount raised “for strategic reasons,” it is believed that CatchThatBus raised a low seven-digit amount in Singapore dollars.
The investors consist of angels and a Singapore-based venture fund, Jungle Ventures, which already counts Malaysia’s iMoney as among its investee companies. Another investor is Singapore’s National Research Foundation (NRF), a department within the Prime Minister’s office.
“We were the first dedicated bus ticketing app in the South-East Asian region for Android phones,” said Viren, the cofounder and chief executive officer, with some satisfaction.
That claim is unlikely to have been the reason why they received funding. If it was, they would not have had to wade through 30 investors before succeeding with Jungle Ventures and NRF.
Rather it is market traction, monthly revenue is in five figures and "growing steadily", and investor confidence that Viren and Ashwin can execute the game plan, which includes regional expansion in South-East Asia.
Already with a presence in Malaysia and Singapore, the duo plan to focus this year on using the new funds for advertising and marketing, as well as additional product development and to expand the company’s sales channels. Next year will see the push into a third country in South-East Asia.
Amit Anand, partner at Jungle Ventures, is excited over the possibilities. “After travelmob, it is a privilege to be associated with another exciting startup that is solving a hard problem in Asia Pacific.
“The CatchThatBus team has brought the entire intercity segment (over 500 destinations) in Malaysia and Singapore online, and we are very excited about the prospects for the company,” he said.
Digital News Asia (DNA) posed a few questions to the duo:
DNA: How were you able to sustain the venture till that moment when revenue started coming in from Sept 2013?
Ashwin (pic): We had an initial RM150,000 grant via the CIP Catalyst programme from Cradle Fund Sdn Bhd, as well as additional money that we made from offline charter sales, apart from dipping into our savings.
DNA: Did you ever think of giving up when things were at their lowest? After all, you did start this journey in June 2011.
Ashwin: We originally started as a team of three cofounders, but one of us had to leave due to financial commitments. Thankfully, Viren and I were able to continue the journey together. Cash flow was a problem from time to time as well, and we both had to borrow from friends and family to keep things going. But we still felt the potential outweighed the risks.
DNA: How did you keep costs as tight as possible?
Ashwin: We tried to keep our overheads low and burn rate small. A lot of our initial work was outsourced to recommended contractors, and we really prioritised the work that we did to those that answered the simple question: How will this bring in more money to the company?
If it didn't add significant value or revenue, we moved it lower down in the priority list.
For example, our mobile app now is out for Android only. We considered investing in developing a release for the iOS as well, but considering almost 80% of our market is Android-based, we've decided to pushed it to a later – a very painful decision for Viren especially, who is a diehard Apple fanboy.
DNA: How many VCs did you speak to before getting Jungle Ventures in?
Ashwin: We spoke to quite a few VCs (venture capitalists), angel investors and high net worth individuals in Malaysia and Singapore, and participated in several pitching sessions. Between 15 to 30 VCs in all.
DNA: Based on your experiences, what would your advice be to your fellow entrepreneurs on engaging VCs?
Ashwin: Engage early when you don't need the money so you're able to make the deal that really sits comfortably with you. The last thing you want to do is to go into an agreement grudgingly, as it will likely sour the relationship quickly.
Thankfully we are very happy with going with Jungle. The ecosystem they've provided us, and introductions to mentors and other startups in their portfolio have been invaluable.
This ‘bus’ is worth catching
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iMoney raises US$2m in Series A funding from international investors
KL games studio gets US$250K from Singapore VC
Is Malaysia ‘losing out’ to Singapore?
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