From a market lacking in technology and digitization, the corporate commuting services firm BusUp will use part of a € 5 million round, led by Mexican early-stage VC firm Proeza Ventures and San Francisco-based Autotech Ventures, which has companies such as Lyft in its portfolio, to expand operations in Brazil, its largest market.
Founded in 2016 by Spanish Eva Romagosa, Alex Canals and Rui Stoffel, and by Brazilian Danilo Tamelini, BusUp started operations in Brazil, the largest market for the company, in May 2018. Currently, it has already set foot in three other countries, in addition to Spain: Portugal, Peru and the United States. Tamelini, BusUp’s president for Latin America, tells LABS that the next destination is Mexico.
“We are in the final stage of negotiation to move to Mexico City and region,” he says. BusUp does not own any vehicles but works with more than 150 mobility operators in the regions where it operates, with a focus on commuting services for large companies and events.
How BusUp works
With contracts ranging from BRL 2 million to 2.5 million a year, companies such as Accenture, Mercado Livre, Siemens, Nestlé, Louis Vuitton and DHL and mega-events like Rock In Rio and Lollapalooza, are some of the clients in the startup’s portfolio.
“We do everything from hiring a bus company approved by us to run the commuting operation through customer service,” Tamelini sums up. Adding technology to transport, the executive says that BusUp’s solution goes from optimizing routes and adapting the size of vehicles to providing reports and KPIs so that client companies have access to metrics such as control of boarding and passenger frequency.
On the end user’s side, the system has its own application, so that passengers can access their route to the departure point and information such as time to reach the destination, among other features.
According to Tamelini, companies that outsource their operations to the startup have a cost reduction of up to 40%. This is due to factors such as cutting routes via logistical optimization, adapting vehicle size, savings through integrated technology management and the sharing of vehicles between employees of different companies.
“We are the first company to offer shared corporate shuttle services. Our system allows the same bus to be shared between companies and they pay in proportion to their use,” he says. By selling idle seats to optimize the same vehicle and route, BusUp manages to generate economic gains and transfers part of this amount to its clients, since 35% is reverted to a discount on the company’s invoice.
“Currently, we lead corporate commuting services in Portugal. We are in almost all business centers in the metropolitan area of Lisbon and share routes within these centers.” With the pandemic, however, BusUp’s sharing model was suspended. “Now, the sharing buses we have are with factory clients or distribution centers. We manage [transport] sharing for companies that already work in the same environment.”
Tamelini says that clients in the service sector, such as banks and technology companies, are still operating mostly in remote work. But other firms such as essential services, industries and distribution centers for e-commerce – clients such as Mercado Livre and DHL – that do not have this alternative, have chosen to hire BusUp’s service, precisely to avoid exposing their employees to public transport. “And in addition, in order to be able to control the capacity of this vehicle, many client companies are operating with 50% occupancy [of the vehicles],” he reports.
In addition to the end-to-end model, in which it runs all the shuttle management and outsources mobility operators, BusUp also offers a SaaS model, in which it performs transport management using its own technology. This, according to Tamelini, happens because some Brazilian regions have only one or two mobility operators.
“In these cases, we do not hire the operator, but we work the system. The client company places us as contract managers and we do the entire structure using the [mobility] operator with whom it already works.” The end-to-end model, according to the executive, is the one with the greatest demand in the markets where BusUp operates.
With an eye on the new work setups, the executive reveals that BusUp is also prepping a new solution targeting the hybrid model. “Since the end of last year, we have been adapting our platform to serve in a hybrid model. We are calling it a flexible shuttle. We will give people the opportunity to schedule the days they will use the vehicle that week and we will determine the route according to the schedule. “
“It will not be a just in time solution, but rather a schedule on demand. People will be able to request the days of use in a given week on our platform and we will know exactly who will use it to be able to optimize the route”. The solution is expected to launch in mid-March.
Why has BusUp chosen Latin America
Since its founding in 2016, BusUp claims to have worked with more than 100 companies and 500 thousand passengers in its countries of operation, in addition to recording an average growth of five times a year. The Series A round announced in February was the startup’s fourth. To date, BusUp has raised about € 8.5 million. The goal for 2021, according to the company, is to further increase sales and portfolio.
With BRL 10 million aimed at the Brazilian market, the startup will invest in marketing and team structure and expects to grow, in 2021, five times more than last year. Operating in the states of São Paulo, Minas Gerais, Paraíba and Goiás, Tamelini reveals that the company intends to reach at least five more states by the end of the year. “Bahia, Pernambuco, Santa Catarina, Paraná and the Federal District are those in the most advanced stage,” he says.
The busuppers – as the company’s employees are called – also grew. The startup ended 2020 with a global team of 56 people, twice as many as in 2019. For 2021, the goal is to attract at least 30 more employees to the company. In Brazil, the BusUp team has 16 employees.
As for the other countries in Latin America, the startup aims to enter the Mexican market, while puts efforts into enhancing the operation in Peru. Tamelini says that the startup closed a partnership with a Peruvian mobility operator in 2020 and is about to start operations in the metropolitan area of Lima, in one of the largest business centers in the region, Macropolis, located in the Peruvian district of Lurín.
The choice for Latin American countries is the result of strategic partnerships, says the executive. “Each place has its own local peculiarities when it comes to private transport. It is not about putting technology there and that’s it. That is why we remain very focused on the alliances between BusUp and local partners. In Peru, as in Mexico, it is the same situation.”