Chalo Raises $40M to Revolutionize Bus Travel in India
From Car Sales to Bus Tech: The Chalo Story
Over ten years ago, Mohit Dubey launched CarWale, a platform facilitating the buying and selling of both used and new automobiles. However, after dedicating more than a decade to this venture, Dubey came to the realization that his efforts were addressing the needs of only a small segment – approximately 3% – of the Indian population. He aspired to tackle a more substantial challenge.
Introducing Chalo: Digitizing Public Transportation
Dubey’s current focus is Chalo, a company dedicated to enabling bus operators to accept digital payments and providing commuters with real-time tracking capabilities. The Indian bus market represents a significant $20 billion opportunity, nearly double the size of the cab market, yet remains comparatively underdeveloped, as Dubey explained in a TechCrunch interview.
“The bus sector has, unfortunately, lacked significant technological advancements or improvements in service quality,” noted Manish Kheterpal, a partner at WaterBridge Ventures, an early investor in Chalo. “Chalo’s distinctive approach is demonstrably improving the daily commutes of individuals across eleven Indian states and is well-positioned for nationwide expansion.”
A Market Ripe for Disruption
Currently, India has a ratio of only three buses for every 10,000 citizens. This indicates a considerable potential for innovation, but also highlights a persistent lack of adequate service. Passengers frequently rely on cash payments for fares.
The availability of monthly passes is limited, and the predictability of bus arrival times at designated stops remains uncertain.
Chalo’s Solutions
These are the core issues that Chalo, established seven years ago, is actively addressing. The company installs GPS devices on buses, allowing passengers to monitor their commute’s location in real-time.
Through its mobile application, Chalo facilitates ticket purchases and the sale of monthly passes, enabling operators to secure a consistent revenue stream.
Challenges and Opportunities
“This presents a considerable opportunity,” stated Dubey, while also acknowledging the complexities of digitizing bus transportation. Bus operators often lack clear visibility into their daily revenue collections.
The ticketing system must function reliably even in offline environments, while simultaneously processing online payments as buses navigate areas with limited or no network connectivity.
Gaining Momentum
Chalo, meaning “let’s go” in Hindi, is now demonstrating significant progress across all areas of its operations.
Series C Funding
On Tuesday, Chalo announced the successful completion of its Series C funding round, securing $40 million in investment. The round was spearheaded by Lightrock India and Filter Capital.
WaterBridge Ventures, Raine Venture Partners, Neeraj Arora (formerly the chief business officer of WhatsApp), and Amit Singhal (formerly SVP at Google) – all existing investors – also participated in this funding round.
Expansion and Impact
Prior to the pandemic, Chalo was operating approximately 1,900 buses. Currently, the company manages 2,500 buses and has commitments for several thousand more. Dubey anticipates that around 8,000 buses will be integrated onto the platform by December.
“It’s unusual to encounter a business opportunity that also delivers a positive societal impact,” he remarked.
“Buses constitute India’s primary mode of public transportation, accounting for 48% of all trips. Despite this dominance, the overall experience is often unsatisfactory. At Chalo, we deploy technology to substantially enhance the bus experience, which in turn boosts ridership. We are now one of India’s largest mobility companies, facilitating 20 million passenger trips each month,” he added.
Employee Stock Option Buyback
As part of this new funding, Chalo will allocate $10 million to repurchase stock options, rewarding both current and former employees, as well as early angel investors.
Investor Perspectives
“Chalo has clearly established itself as a leader following the COVID-19 pandemic by focusing on the underserved public transport sector,” stated Vaidhehi Ravindran, a partner at Lightrock. “This positions them to become the standard mobility operating system for the country. Public transportation is essential for building a larger mobility platform that addresses mobility needs at scale.”
“We are impressed by the founding team’s innovative, technology-driven approach combined with a genuine commitment to serving society. Their understanding of stakeholder needs, integrated into the business at every level, makes them the ideal team to develop this solution for the Indian public. We are excited to partner with Chalo as they continue to transform Indian mobility.”
