BlaBlaCar is an iconic name in the French startup ecosystem. Carpool and bus ticketing companies have been around for so long that it’s hard to think of them as startups anymore. Nonetheless, BlaBlaCar is a very interesting company today thanks to its unique trajectory.
What started out as a scrappy online hitchhiking community became a startup that raised hundreds of millions of dollars and reached unicorn status. Then we expanded into many countries across multiple continents, then scaled back our ambitions and started thinking about profitability.
Today the company announced that it has secured a revolving credit facility of €100 million ($108 million at today’s exchange rates). This will give us a new war chest to plan for the future and continue to drive growth, including through acquisitions.
“Debt is a relatively attractive, non-dilutive and very flexible tool,” Brusson said. The €100 million credit limit covers several large banks based in France, the UK and the US.
BlaBlaCar currently pays no interest because it has not yet exceeded its debt limit. But Brusson said he plans to use that debt facility to acquire smaller companies. With many startups struggling to raise their next round of funding, BlaBlaCar may be able to step in and acquire these smaller companies.
Surplus over the past 24 months
Although BlaBlaCar is not a public company, we are slowly embracing the fact that we can share some metrics more publicly. This allows BlaBlaCar to reveal for the first time that it has reached profitability. In fact, it has been generating revenue since April 2022.
This milestone will come as a huge relief as 2023 has been a difficult year for French startups. Except, of course, when dealing with artificial intelligence products.
“Every business is profitable. We have been profitable for almost two years.” Co-founder and CEO Nicolas Brusson told TechCrunch. “Except for the first two months, 2022 marked the first time since COVID-19 that it has been almost a year. We recorded revenue of €195 million. And we’ve basically had a slightly negative result this year, but that’s really because we had a terrible first quarter.”
“But we have been profitable since the second quarter of 2022. Then, in 2023, revenues soared to more than €250 million. So we’re growing our sales at just under 30% and still being profitable.”
Profitability can mean different things to different people. Many companies like to claim they are profitable while talking about EBITDA, a financial metric that does not take into account costs associated with the company’s assets. And Brusson was a bit fed up with companies pretending to be profitable when in fact they were losing money every year.
In the case of BlaBlaCar, the company earns money on an EBITDA basis, but all things considered, it also generates net income. In any case, BlaBlaCar does not own any cars or buses.
By 2023, 80 million passengers have booked bus or carpool rides on BlaBlaCar. And the good news is that there are BlaBlaCar users not only in France but all over the world.
“Brazil is bigger than France in terms of number of users. And next year, I think India will have more carpooling than France,” Brusson said.
The company has not yet started monetizing users in India, Brazil, Mexico, or Turkey. There will be no cuts to carpool transactions. Booking fees will be added gradually, which will also help increase the company’s revenue.
One wrinkle is Russia. When the war in Ukraine began, BlaBlaCar’s Russian users numbered in the millions. While many technology companies have decided to sell their Russian subsidiaries, BlaBlaCar’s Russian activities have been completely separated from the rest of its business, but BlaBlaCar has no plans to sell them. Brusson argues that this is counterproductive because it essentially means handing it over to a Russian-based owner.
“Currently, this is very small, accounting for less than 5% of our revenue. Although it is still part of the group, it is completely separate and operates independently. The company is completely separate from the group. But if you want to sell it, as it stands now, it’s like giving it to someone else.”
Add train ticket
In Europe, BlaBlaCar seeks to integrate all ground transport methods. In addition to carpooling and bus riding, we plan to add train tickets. Users will be able to purchase tickets at some point over the next year.
“Our idea is to combine this with carpooling. So we will be able to offer train and carpool trips almost door to door,” Brusson said.
Even if you don’t book your next train ride on BlaBlaCar, the company is also experimenting with last-mile carpooling. “Then we have other models for slightly shorter distances. The idea is to connect train stations with destinations. Typically, when you arrive at Vannes station you have to travel to your grandmother’s house, a villa or a weekend getaway. “There are still about 10 to 40 km more to go,” he said.
Since there are already many BlaBlaCar users driving in that direction, the company will ping those drivers to see if they can pick up a group of people at the train station and drop them off at their destination.
In non-European markets, bus ridership is the biggest opportunity. “The good news for us in these markets is that buses remain a very offline and fragmented industry,” Brusson said. He pointed out that in India and Brazil, people spend billions of dollars on bus tickets, suggesting there is room for BlaBlaCar to grow once again.