Chalo, a startup that is digitizing bus commutes in India and which recently raised $40 million in a financing round, has acquired Amazon-backed app-based office commute bus aggregator Shuttl in an all-cash deal, the two said on Tuesday.
Chalo founder and chief executive Mohit Dubey said the acquisition of Shuttl, which operates thousands of buses aimed at working professionals, will help his startup gain presence in many parts of the country including metro cities, broaden the technology and product offerings, and also supercharge the firm’s overseas expansion efforts.
“Shuttl and Chalo, these are the firms that are positioned to become the largest mobility firms in the world. I wish the pandemic had not happened, but it has allowed the two companies with a similar focus to come together,” he said in an interview with TechCrunch.
Dubey declined to disclose the financial terms of the deal but said Shuttl co-founder and chief executive Amit Singh has agreed to continue his journey. Chalo will continue to use Shuttl’s branding, he said.
“We started out to take the pain away from daily commuters. In the process, we ended up building a category, and inspiring others from different parts of the world to do the same. It’s a bittersweet moment for us. We believe the team and legacy of Shuttl will thrive equally well in the new set-up,” said Singh in a statement.
For investors of Shuttl, too, it’s a bittersweet moment. The startup had been struggling to raise a new financing round and had cut its workforce to address the pandemic. For months, murmurs around Shuttl shutting shops were floating.
Shuttl had raised over $97 million in a series of financing equity and debt rounds, according to data intelligence platform Tracxn. The startup counts Amazon, Times Internet, Sequoia Capital India, Lightspeed Venture Partners, and Toyota among its backers.
Chalo said that the entire current team of Shuttl, including several key executives who have been part of the startup from the beginning, will continue in their roles.
Dubey said he has been engaging with Shuttl’s Singh for several years, but the two began acquisition talks only two months ago.
At stake is India’s $20 billion bus market, which is almost twice the size of cabs. Bus commuters are more accessible to the broader masses of the country, but currently, there are very few buses in India: about three for every 10,000 people.