Amazon-backed office shuttle service Shuttl finds a saviour in Chalo
Chalooperates nearly 15,000 buses across 31 cities — including Karnataka, Kerala, Uttar Pradesh, and Bihar.
- The acquisition of
Shuttlwill allow Chalo to expand its presence in many parts of the country including metro cities.
- Shuttl had raised $122 million from SIG Investments,
Amazon, Dentsu, Sequoia Capital and others.
AdvertisementAmazon-backed app-based office shuttle service Shuttl — which announced closure of its operations in July this year — has been acquired by bus tracking app Chalo.
Financial terms of the transaction have not been disclosed yet.
The seven-year-old Chalo was founded by Vinayak Bhavnani and carwale.com’s cofounder Mohit Dubey. The company digitises buses by adding bus tracking services as well as contactless payments solutions. It operates nearly 15,000 buses across 31 cities — including Karnataka, Kerala, Uttar Pradesh, and Bihar.
The company claims to complete 20 million rides on a monthly basis.
Chalo has raised $47 million to date, with $40 million coming in Series C round raised last month. It is backed by former Google India executive Amit Singhal, Lightrock, Raine Ventures, WaterBridge Ventures and more.
The acquisition of Shuttl will allow Chalo to expand its presence in many parts of the country including metro cities, Chalo’s founder and chief executive Mohit Dubey said.
Chalo also believes that the acquisition could help the company broaden its technology as well as product offerings, and look at overseas expansion.
“Chalo and Shuttl were already the largest brands in their space. Together we now fulfil more than 25 million rides per month, and aim for international expansion along with further growth in India as well,” Dubey said.
Shuttl would continue to use the brand name ‘Shuttl’ even after the acquisition. The company’s current team, including the core team, will continue with their current roles.
Why did Shuttl sell off?
Shuttl was founded by Amit Singh and Deepanshu Malviya in 2015 and was the biggest private player in the intra-city bus services. The company specially focused on office commute and has garnered the interest of many investors since its inception.
It has raised about $122 million (₹908 crore, at current conversion rate) to date from investors like Hong Kong-based venture capital firm SIG Investments, Amazon, Dentsu, Trifecta Capital, Sequoia Capital, Lightspeed India Partners, and Times Internet.
It claimed to be serving over 100,000 rides daily by running 2000 buses on an aggregator model across 150+ routes in the above-mentioned six cities.
However, the company’s failure to pivot and cash burn rate is being cited as the reason for this company’s untimely shut down.
The company’s expenditure in FY20 alone was more than what the company has earned from operations since its inception.
AdvertisementAn investor, on the condition of anonymity, had previously told Business Insider that Shuttl can be absorbed by or merged into other mobility businesses to create a larger offering. “While for the buses, I don’t see an offering as such, but for the team, I see offerings in a Vogo, Rapido or in a Chalo. These are the outcomes I see. I see more of a startup merger than a traditional company buying it out,” the person added.
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