BlaBlaCar Secures $115 Million in New Funding

The French startup, BlaBlaCar, has successfully completed a new funding round, raising $115 million (€97 million). While widely recognized for its carpooling marketplace, the company has strategically expanded its services through acquisitions. These include Ouibus, a bus marketplace, and Busfor, an online bus ticketing platform.

Investment Details

VNV Global spearheaded the current investment round. Joining them are two new investors: Otiva J/F AB and FMZ Ventures. Otiva J/F AB was established by Jonas Nordlander and Filip Engelbert, the founders of Avito, a prominent classified ads platform serving the Russian market. Avito itself was acquired by Naspers, a global technology investment firm.

FMZ Ventures is a growth fund initiated by Michael Zeisser, who has a strong investment background with Alibaba and served on the boards of Lyft and Tripadvisor.

Convertible Note Structure

The funding is structured as a convertible note. This means the company’s valuation will be determined by a future financial event, such as a subsequent funding round or an initial public offering (IPO). However, BlaBlaCar’s co-founder and CEO, Nicolas Brusson, characterizes this as a “pre-IPO convertible” due to the company’s substantial cash reserves.

“We entered this round with significant capital already available, and following this funding, we maintain a cash position exceeding €200 million,” Brusson stated.

A clause exists within the note’s terms. Should a qualifying financial event not occur within a specified timeframe, the $115 million will convert into BlaBlaCar shares based on a $2 billion valuation.

Strategic Pillars: Carpooling, Buses, and Aggregation

BlaBlaCar’s current funding strategy centers around three core pillars: carpooling, buses, and aggregation.

Carpooling: The Foundation

BlaBlaCar’s initial success stemmed from its carpooling service, connecting drivers with empty seats to passengers traveling in the same direction. The company launched 15 years ago with this core concept.

While the lockdowns of the past year impacted carpooling activity, Brusson emphasizes its distinct nature compared to traditional transportation modes like trains or flights. “Our carpooling network operates without fixed costs,” he explained. “We don’t bear the expense of running empty vehicles, as the system is entirely community-driven.”

Although revenue experienced a decline during the lockdowns, activity rebounded last summer and has fluctuated with changing restrictions. Brusson believes that “the car will continue to be a universal connector, independent of train stations or bus terminals.”

In 2020 alone, BlaBlaCar facilitated travel for 50 million passengers across 22 markets, demonstrating the enduring strength of its carpooling marketplace.

Buses: Expanding Reach

For several years, BlaBlaCar has focused on expanding its bus services, recognizing a significant opportunity, particularly in emerging markets and Eastern Europe.

A substantial number of buses operate without online ticketing options. BlaBlaCar’s objective is to transition this offline supply to its online marketplace, representing a large total addressable market.

To support this expansion, the company is acquiring Octobus, a Ukrainian firm specializing in inventory management systems for bus operators. “This acquisition strengthens our technological infrastructure in the region,” Brusson noted.

Aggregation: A Multimodal Future

BlaBlaCar’s third pillar involves fostering user loyalty by creating a comprehensive travel platform. The company aims to develop a multimodal app integrating various shared transportation options – carpooling, buses, and eventually, trains.

The integration of train operators is planned for late 2021 or early 2022. When questioned about potential competition with Omio (formerly GoEuro), a platform for booking trains, buses, and flights, Brusson outlined a different approach.

BlaBlaCar intends to initially concentrate on a select number of countries, offering a complete range of local travel solutions.

The vision is for users to seamlessly plan journeys through the BlaBlaCar app, potentially combining train travel with a carpooling ride to reach smaller destinations. The company’s extensive network uniquely positions it to connect even remote locations through shared transportation options.