Mohit Dubey had a change of heart in Bhopal. The young software programmer from Mumbai, who just got his prized US visa, decided to spend three months with his in-laws in Bhopal before joining his overseas job. Dubey started working at a small company in the capital city of Madhya Pradesh—known as the Heart of India—which provided citizen-centric services to villagers such as getting a birth certificate and a copy of land records. During one of his visits to a remote village, he discovered a shocking side of the countryside: People didn’t have access to doctors one had to wait for hours to get a bus and many died because they couldn’t reach the city hospitals on time.
Dubey dumped his US dream. “Dying due to lack of health care access is outrageous and not acceptable," he says. The software programmer decided to take a stab at telemedicine to solve rural India’s woes. The idea was to connect distant villages with district hospitals. The problem, though, was that very few believed in his idea. For three years, Dubey made futile attempts to convince government officials and politicians, but to little avail. His telemedicine venture did not got a green light.
Two years later, Dubey, along with three co-founders, started CarWale, an automotive classified portal in 2005. The idea was to solve the mobility needs of urban India. Five years later, after scaling the venture—it was among the top three players the others being CarDekho and CarTrade—Dubey sold it to German media conglomerate Axel Springer, one of the largest multimedia companies in Europe which picked up a 52.1 percent stake. Another 18.3 percent was bought by the India Today Group. “The offer was too tempting to resist," he recalls, declining to share the deal size. There was another reason to sell out. The first-time entrepreneur wanted to expand his maiden venture abroad. A big European partner with deep pockets, he thought, was best suited to make CarWale live its global dream.
By 2013, Dubey realised that cars were not the best vehicles to reach out to the masses. Car penetration, which was one car for 100 Indians in 2008, had laboured to two cars per 100 Indians in five years. A reason for the muted growth in car ownership in cities was largely due to the mushrooming services of Ola and Uber which had made city slickers stay away from buying cars. “Indian mobility is definitely not cars," he concluded. Buses had the wheels that moved Bharat.
In 2014, Dubey formed Chalo, a division within CarWale, to solve the mobility issues of millions residing in Tier II and beyond. He put in his own savings, managed to get money from Neeraj Arora, a former chief business officer of WhatsApp Amit Singhal, a former Google Search head and Anupam Mittal, founder of Shaadi.com, and rolled out Chalo, an intra-city mobility platform for bus commuters.
A year later, in November 2015, CarWale got sold for the second time. Rival firm CarTrade became the new owner, and after two years, Dubey left CarWale to join Chalo. For the first three years—2014 to 2017—Chalo was helmed by Vinayak Bjavnani. It remained confined to Bhopal, provided live tracking of buses and multi-model trip planner services to commuters through its ETA app, had zero revenues and no business model.
The progress was rapid. After all, in 2017, Chalo was a one-city operation. Though it was solving the commuting woes of the masses, it didn’t have enough oxygen to survive. Dubey decided to change the business model from 2018. Chalo couldn’t charge from users who found live tracking of the buses useful, while bus operators had no interest to pay a penny to the startup which promised to streamline operations.
The business made sense. Eighty percent of the buses in India, Dubey and his team figured out, were run by small private operators. “India has over 5 lakh buses for daily commute, and only 1.5 lakh are run by the government," claims Dubey. Another insight gathered was that over 80 percent of the buses clocked under ₹7,000 every day. Buses, says Dubey, were running with only 35 percent utilisation. Chalo promised to change the game for bus owners.
“Chalo is reimagining public transport experience," says Priya Mohan, partner at Venture Highway, a venture fund investing in early-stage startups. Given the stakeholders involved—government, bus operators and the public—the complexity of the problem is high. To emerge as a winner in such an environment, a deep understanding of the stakeholder personas and their incentives, structural challenges and levers for scale are super critical. “Chalo has done just that," reckons Mohan. As early investors in Chalo, Venture Highway’s investment was driven by two factors: Size of the problem in Bharat, and the real impact it could have. “Nothing connects more to Bharat than its public transport such as buses and trains," he points out.
Dubey doesn’t have any illusions about overnight success. Though he had his share of backers, most of the funders have shied away from taking heavy bets as there is no equivalent model in the the US or China. “Chalo is quintessentially an Indian model," he says.
Chalo, Dubey asserts, will be the first bus unicorn in India. “But I am not chasing valuation. I am creating value," he says, adding that Chalo’s team has its heart in the right place. “We are building the largest mobility company."
First Published: Jun 08, 2021, 12:09
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