SUMMARY
Founded by AbhiBus founder Sudhakar Reddy Chirra in 2022, Fresh Bus aims to take on IntrCity SmartBus, ZingBus, gogoBus that operate ICE vehicles
After securing INR 26 Cr ($3.1 Mn) in its seed funding from ixigo in February 2023, the startup plied its first few buses on the Bengaluru-Tirupati route last month
With only 24 ebuses deployed in the first phase (both bought and leased), Fresh Bus is aiming to take its vehicle count to 200 in the next 18 months
With the awareness and adoption of electric vehicles (EVs) becoming more mainstream, the trend of vehicle electrification is visibly proliferating across vehicle categories. Although the growth is fast-paced in two- and three-wheeler categories, four-wheeler and heavy-duty vehicle segments are also showing promising signs of going the electric way.
ixigo-backed Fresh Bus has become the latest addition to the EV ecosystem after it launched its electric bus service between Bengaluru and Tirupati in Andhra Pradesh last month. Armed with the vision to save the planet by reducing carbon emissions, the startup is on a mission to make interstate bus journeys more comfortable and efficient, thereby ensuring a superior travel experience to its customers.
Founded by AbhiBus founder Sudhakar Reddy Chirra in 2022, Fresh Bus aims to take on the internal combustion engine (ICE) vehicle players, such as IntrCity SmartBus, ZingBus, gogoBus, and others, in the online bus aggregator and operator market by providing a more efficient and budget-friendly travel experience.
Importantly, Fresh Bus has commenced its journey in an extremely lucrative travel segment. This is because the outstation bus market is expected to touch $48 Bn by FY25, growing at a compound annual growth rate (CAGR) of 9.8% between FY20 and FY25, a report suggests.
Despite this, the outstation bus market in the country is still largely fragmented and unorganised, taking its toll on both customer experience and the quality of travel.
This particular gap in the segment crafts greater opportunity for players like Fresh Bus, who want to carve a niche in the burgeoning EV transportation market.
From AbhiBus To Fresh Bus — This Founder’s Quest Is To Disrupt The Indian Bus Market
Chirra’s first venture AbhiBus – a bus-ticketing platform that was acquired by ixigo in August 2021 – was reportedly the second-largest bus aggregator in the country in 2019-20. It sold 26,000 bus tickets every day through its platform during that period.
From being in the world of pure-play online travel aggregator (OTA), Chirra’s transition to starting a bus-operating company did not happen overnight. Inc42’s conversation with him and ixigo cofounder and CEO Aloke Bajpai revealed that the idea for such a venture was brewing even before the acquisition happened. However, the choice to explore EV buses happened much later.
While Fresh Bus was incorporated in 2019, its business operations started in August 2022. After securing INR 26 Cr ($3.1 Mn) in its seed funding from ixigo in February 2023, the startup plied its first few buses on the Bengaluru-Tirupati route last month.
It must be noted that Fresh Bus is a fleet operator and has collaborated with heavy-duty EV manufacturer Olectra to procure buses.
Based in Hyderabad, Olectra is one of the oldest EV players and largest manufacturers of electric buses in India. The company has provided hundreds of ebuses to different state governments and private players since 2017.
“An Olectra ebus costs us around INR 2 Cr. While we have initially bought a few buses, we are planning to work with a fully-leased vehicle fleet going forward. This will help us shift to an asset-light business model,” Chirra said.
With only 24 ebuses deployed in the first phase (both bought and leased), Fresh Bus is aiming to take its vehicle count to 200 in the next 18 months.
Fresh Bus also plans to start operating on the Hyderabad-Vijaywada route this month. Several other routes such as Bengaluru-Chennai, Mumbai-Ahmedabad, and Goa-Pune are also on its cards. With this, Fresh Bus projects to scale to over 1,000 ebuses and set up over 100 charging stations pan-India by the end of 2026.
Fresh Bus vehicles are equipped with 422 kWh battery packs that come with a range of 400 km per charge. The startup is also building its own charging stations and has procured 240 kW chargers from Siemens. Currently, it has four charging stations.
Fresh Bus’ Three-Tier Business Model
The business of Fresh Bus is built on three core pillars – customer experience, environment, and technology.
In its endeavour to make journeys more convenient and safer, Fresh Bus has equipped its fleet with enhanced safety features, including regenerative braking, real-time tracking, security CCTVs, medical kits, glass hammers, and fire extinguishers.
The startup claims that its drivers are examined for alcohol before they start their journey. Besides, there is also a random drug test, and the drivers are trained to handle all sorts of challenges that may occur while travelling.
According to the startup, the batteries used in its buses are fireproof. Besides, as part of the maintenance contract with Fresh Bus, the startup gets a team of Olectra engineers at every depot. The engineers collect real-time, cell-level details of a vehicle’s batteries, which are then used to identify issues and address them efficiently.
Other Sharks In The Space?
Fresh Bus’ major competitor GreenCell, which operates its ebus brand NueGo, recently bagged $55 Mn (INR 450.6 Cr) in debt to increase its fleet size. It is already running over 600 ebuses across 21 cities in the country. However, a major differentiating factor for Fresh Bus is that, unlike the former, it doesn’t collaborate with various local travel operators to run its buses.
Fresh Bus works on a full-stack model, which enables it to own end-to-end customer experience and data.
“India deserves high-quality bus supply just the way we have high-quality hotel supply and flight supply,” said ixigo’s Bajpai, adding that ixigo wants to have more Fresh Bus-like operators on its platform, who can improve the experience of its customers.
Cracking The Price Code
“The reason we have selected EV is because it’s environmentally friendly. Also, if we can really make the technology work, we can bring a price point which is more economically viable than diesel buses,” Chirra said, adding that with the right vehicle utilisation, “we will be able to crack this model much better than the diesel model in terms of unit economics.”
In fact, Fresh Bus has launched its service at a price point of INR 399 on its current operational route, where the bus fare starts from at least INR 499.
However, it must also be noted that the startup can afford to provide its service at a lower price, given the lesser operational expenditure of EVs compared to ICE vehicles. Currently, NueGo also offers a similar price point on the Bengaluru-Tirupati route.
Moreover, the Centre’s advisory to states to give exemptions to EVs in road taxes, and states like Tamil Nadu and Uttar Pradesh already implementing the same, would prove to be a major cost saver for electric bus operators.
Moving forward, Fresh Bus may also collaborate with other EV OEMs, depending on the product innovation and necessity.
Fresh Bus is looking to raise another round of funding by the end of this year, after the startup is able to seamlessly run its current fleet of 24 buses, with the enhanced customer experience that it has aimed for and a good customer satisfaction score.
Currently, travellers can book tickets on the Fresh Bus website as well as platforms like redBus and AbhiBus. The startup is yet to launch its mobile application.
