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InVenture Partners sells its stake in Busfor start-up

16.11.2017
Source: Vedomosti

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Busfor sends its customers not only to Russian cities, but also to CIS countries and Europe
Photo: Busfor

The Venture Fund InVenture Partners sold its stake in the Busfor start-up to Elbrus Capital and Baring Vostok funds, said Anton Inshutin, Managing Partner of InVenture Partners, Ilya Yekushevsky, Busfor co-founder and representative of Baring Vostok. The partners do not disclose the sums and details of transactions.

Busfor is an Internet service for the sale of bus tickets making money off commissions. In June 2014, Busfor (then called Gill Business Systems) managed to raise $3 million of investment from venture funds InVenture Partners, Intel Capital and Finsight Ventures. No information was disclosed about the size of their stakes, however each of the investors received an equal share in the company. And in total, new investors owned a blocking stake, as reported to Vedomosti by a source close to the agreement participants.

In October 2016, Elbrus Capital and Baring Vostok invested $20 million in Busfor having purchased the stakes in Intel Capital and Finsight Ventures, said Inshutin. According to him, before this round InVenture Partners also bought out stakes in some co-founders of Busfor and increased its share in the start-up.

InVenture Partners invests in projects at their early stages, which Busfor has already outgrown, these are, as Inshutin belives, the reasons why the stake in Busfor was sold. The partners did not specify the total amount of investments and its profitability. A year ago, managing partner of InVenture Partners Sergey Azatyan told Vedomosti that the internal rate of return of the fund is 38% per annum in US dollars. Since 2016, the company's valuation has increased, that is why InVenture Partners manage to earn a high yield out of investment, Ekushevsky emphasized.

Second Fund — InVenture

In 2016, InVenture Partners launched a second serial fund with a capital of $150 million. The capital of the first fund amounted to $100 million, but this money has already been fully invested. According to the American start-up database Crunchbase, InVenture Partners has invested in 14 companies. Part of the investment of the first fund flew back to its investors - for example, by partial sale of a stake in Gett to Volkswagen which in May 2016 invested $300 million in that service.

Busfor — the market leader in its segment, growing from year to year, believes Mikhail Lobanov, Managing Partner of Target Global. According to Lobanov, the sale of the stake allowed InVenture Partners to recoup initial investments at least twice. The entire start-up, as Mr. Lobanov estimates, costs $50 million. The Director of a large investment fund agrees with his statement: Elbrus Capital and Baring Vostok are not interested in projects that cost less than $50 million. According to the interlocutor of Vedomosti, who is familiar with Busfor founders, InVenture Partners could earn from $5 to $10 million.

The investment director of Russian Venture Company (RVC) Alexey Basov estimates the Russian bus transportation market at about 150 billion roubles. However, the online segment share does not exceed 1%, while in Europe it reaches 40%. Therefore, there is a growth potential in this market, concludes Basov.

The company will invest its funds in "strengthening foothold" in those markets where it already operates as well as projects in CIS and Eastern Europe new for Busfor which are new for Busfor, says Ekushevsky.

Withdrawals in Russia are rare, according to the overview of the venture industry made by PwC and RVC. In 2016, investors sold their shares in 30 projects, while the number of new investments amounted to 180. The average deal size was $1.1M.

The representative of Elbrus Capital did not respond to the enquiry of Vedomosti.



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