European Ridesharing Blablacar raises $100M led by Index Ventures

Jul 2, 2014
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BlaBlaCar_Ridesharing

Paris-based Blablacar has raised a monster round of $100 Million led by Index Ventures, with participation by Lead Edge Capital as well as existing investors Accel Partners & ISAI. The round, which is record-setting in France, next to Deezer’s previous €100 Million round from Access Industries, will allow Blablacar to scale up from 12 countries across Europe to a global ride-sharing platform. With 150+ employees and more than 8 Million members (including 250,000 members in Russia and Ukraine, where they launched just a few months ago), Blablacar has grown to become Europe’s leading ride-sharing platform – as if there was every any doubt.

Index Ventures’ investment was led by Dom Vidal and Martin Mignot, Index’s resident French investors (who just finished raising a €400 Million European fund), with Accel’s Philippe Botteri, who led Bessemer’s investment in Criteo in a previous life, & ISAI’s Jean-David Chamboredon maintaining their roles. Blablacar previously raised a $10M series A led by Accel in 2012, after a €1 Million Seed round led by ISAI in 2010.

“ISAI has been very pleased to witness and support the Blablacar story for the last four years. We are very excited to see the company in a position to accelerate even more in order to become a global leader” – Jean-David Chamboredon, CEO ISAI

BlaBlaCar_Founders

Blablacar owes its success to several factors. Co-founders Fred Mazzella (CEO), Nicolas Brusson (COO) & Francis Nappez (CTO) compliment each other very well in their roles, mixing vision, execution & technical talent to create a strong leadership.

That team has built a great product: Blablacar owes much of its growth to a product that pays meticulous attention to details, like whether drivers are OK with pets or smokers in the car, as well as the platform’s namesake feature, the ability to announce whether you are a Bla, a BlaBla, or a BlaBlaBla passenger/driver (i.e: how talkative are you?). 

In addition, their ability to take hitchhiking – a term which carries more baggage than you could fit in the trunk of a car – and create a compelling brand around Trust has clearly distinguished it from competitors.

Global Expansion – “Blablacar everywhere it could work”

Blablacar has been particularly successful in international expansion. Accel’s Philippe Botteri says that he expects to see Blablacar in every market where its community-driven marketplace can work: namely, countries or chains of countries with several large metropolitan areas that are at least 180Km apart – quite specific, but it lines up well with where Blablacar has found success so far.

A key success factor has been its ability to acqui-hire into its leading markets – Poland, Italy, & Russia/Ukraine were all acquihires of teams that Botteri says were looking for seed money, and who shared Blablacar’s passion & enthusiasm for ride-sharing.

Today, $100 Million means much more hiring (they currently occupy the same building as fellow French tech company Criteo, and there’s plenty of room to fill), but it also means doubling down on market expansion, something they’ve become somewhat accustomed to. Key markets they are eyeing include Turkey, Brazil & India – China & the USA seem to be the only out-of-bounds markets, though nothing is set in stone for this startup.

In 9 months, from $20 to $100 Million – thinking Global.

Speaking with COO Nicolas Brusson, a former VC who led the fundraising efforts, he spoke of how he set out last October to raise €20 Million, which ended up turning into $100 Million, after discussions led the team to realize that now was the opportunity to go global. Brusson says that launching in Ukraine & Russia was an eye-opener for the team. “Someone came to me and said ‘Hey Nicolas, what do you know about Russia?’ and I said ‘Nothing’ and we thought ‘Could we do Blablacar there?’” Once unknown, non-western European markets became attainable, it was only a matter of time before emerging markets in Asia, Africa, South America & beyond became appealling.

Brusson says the fundraising means a lot for the French & European startup ecosystem: while Deezer’s fundraising was previously an outlier, a $100 Million investment from Index & Accel should dispel any thoughts about whether European tech startups can raise late stage in Europe – the limitation is now entirely mental.

Lastly, where Deezer has always been chasing to catch up to Spotify, Blablacar is a leader in its industry

Uber vs. Blablacar – Spot the Differences.

With the new funding, it is easy to tie connections to Uber, or even Airbnb, where Blablacar finds familiarity in the sharing economy and on-demand rides. Even in Spain, the first market outside of France where Blablacar has rolled out its online payments feature (which allows them to take commission on rides, as well as make handling payments easier for drivers), the Spanish government recently lumped Blablacar (temporarily) into legislation it was preparing against Uber; however, where Uber head of Europe Pierre-Dimitri Gore-Coty sees Blablacar as Uber’s brother in crime, referring to Blablacar as inter-city transportation where Uber is intra-city transportation, Accel’s Botteri says the differences run deeper, such as Blablacar’s community crowdsourced drivers vs. Uber’s recruited, staffed drivers.

Blablacar rolling out short-distance or metropolitan routes anytime soon doesn’t look likely – the community model relies on travel being expensive & far, and the economic model for short distance travel doesn’t align with Blablacar’s “cover your gas” pricing structure.

A $1 Billion startup built on Hitchhiking

While the founders refused to comment on the valuation of the company, it is safe to say that Index, Accel, Leading Edge & ISAI (who really hit a homerun on one of their first investments from 2010) are betting on Blablacar being a multi-billion dollar business. Botteri gleefully trotted out the figure “700 Million trips that were more than 160 Kilometers in Europe last year.”

Blablacar has only scratched the surface with 8 Million registered users in Europe. What will they look like when they have 100 Million members around the world? That’s a question Nicolas, Fred & Francis will be seeking the answer for in the coming years.