BlaBlaCar is an online transportation platform that allows customers to carpool as well as book bus rides all within one single application.
BlaBlaCar makes money via service fees, revenue sharing with bus operators, referral as well as subscription fees.
Officially founded in 2004, BlaBlaCar has grown to become one of the biggest transportation platforms in Europe and beyond. The company is currently being valued at $2 billion.
What Is BlaBlaCar?
BlaBlaCar is an online transportation marketplace that connects members looking to carpool or travel by bus.
Here’s how it works: first, users either navigate to its website or download any of BlaBlaCar’s mobile apps (available on Android and iOS devices).
Members then enter their origin, destination, as well as the date they intend to travel on. BlaBlaCar presents you with all the available bus and carpooling options for that particular route.
The carpooling option, as the name suggests, connects members between each other. That means you partake in a ride that somebody is already set to drive anyways.
Drivers on BlaBlaCar are ID, phone, and email verified. On top of that, they can link their social profiles (such as Facebook) and can be reviewed by other members.
They can, furthermore, insert additional facts about themselves, such as how chatty they are or whether they accept pets.
In selected countries, BlaBlaCar also offers a daily carpool commute (much like Waze with its Carpool service) via a separate application called BlaBlaCar Daily. The service is primarily aimed at members who seek to carpool for their way to and from work.
Apart from the carpooling option, members can also hop on one of the many BlaBlaCar-branded buses for their travel needs. Here, the platform mostly works together with third-party carriers that execute the rides on the company’s behalf.
BlaBlaCar is currently available in 22 countries (mostly across the European region). The platform counts over 25 million travelers every quarter.
How BlaBlaCar Started: Company History
BlaBlaCar, headquartered in Paris, France, was founded in 2006 by Frédéric Mazzella, Nicolas Brusson, and Francis Nappez.
Growing up, Mazzella trained to become a classical pianist but eventually traded that in to pursue a degree in Physics at Ecole Normale Supérieure (one of the hardest to get into of France’s grandes écoles)
In 1999, at the height of the dot-com bubble, he moved to the States to continue his Physics studies at Stanford. Over there, Mazzella worked as a part-time research assistant to be able to finance his studies.
Two years after his graduation, during Christmas of 2003, Mazzella found himself in a bit of a pickle. At the time, he was working in Paris and wanted to head home to be with his family.
However, there were two problems. For once, his hometown of Vendée is located 500 kilometers away from Paris. Second, all the available train tickets were already fully booked.
He then called up his sister who drove all the way to Paris to pick him up. The same train eventually passed them on the highway while being obviously packed. Yet, all the vehicles driving alongside them were literally empty (apart from the driver).
In 2004, a year after his proverbial lightbulb moment he unveiled a self-programmed website named Covoiturage.fr to the French public. Being a solo founder at the time while still employed, growth more or less was non-existent.
Furthermore, Mazzella did come from an engineering background and, therefore, lagged the skills to be able to grow a company. To obtain the necessary business acumen, Mazzella enrolled at INSEAD to do his MBA. INSEAD ultimately became the place where he met Brusson who attented the same class.
Brusson himself spent the previous seven years in Silicon Valley where he worked for several startups. Mazzella told him about his idea. This led them to draw up a business plan, which they presented at the annual INSEAD Business Venture Competition.
Despite the positive feedback, Brusson ultimately chose the safer route and, in 2007, moved to London to work in venture capital. He eventually re-joined BlaBlaCar in the spring of 2011 to aid the team in its fundraising efforts. A year later, he finally committed full-time to become the firm’s COO.
In the meantime, Mazzella remained committed to his idea. To be able to create a functioning website, he recruited Francis Nappez (who he met through mutual contacts in 2006), a software engineer with close to a decade of practical experience.
As these things normally unfold, Mazzella did end up having his breakthrough moment. In 2007, the French train network was shut down due to a strike. In response, passengers looked for alternative traveling options, which they found in CoVoiturage.
Experiencing the advantages of carpooling first-hand, many of the customers that turned to the platform remained loyal members throughout the years. The increase in user adoption allowed the team to expand into new markets as well. In late 2009, they launched Comuto.es in Spain on the backbone of a $600,000 seed investment.
However, their biggest boost would come roughly six months later. The eruption of Icelandic volcano Eyjafjallajokull in June 2010 led to dozens of canceled flights as well as booked-out trains.
Much like the strike three years prior, many travelers did turn to carpooling to be able to reach their destinations. Consequently, CoVoiturage and Comuto experienced a great surge in demand (the former, for instance, was able to double its traffic).
The public exposure allowed the team to raise their first institutional round of funding the same month the volcano erupted. In total, they raised €1.3 million from a variety of European VCs. A year later, in April 2011, Covoiturage.fr hit the inaugural mark of one million members after seven years in business.
Yet, being the dominant carpooling platform in France was just the first stepping stone in becoming a global transportation brand.
At the time, C2C marketplaces like Airbnb and Uber began taking the world by storm, allowing people to even make a living as a result of them. As such, internet users became more and more comfortable with meeting strangers from the internet (such as sleeping in their homes).
The founding team was able to use that very same narrative to their advantage as well. In June 2011, they introduced BlaBlaCar.co.uk to British customers. A few months later, all of its local domains were rebranded into BlaBlaCar to create a unified brand experience.
In January 2012, the team came one big step closer to fulfilling that vision. World-renowned investor Accel led a $10 million round, which allowed BlaBlaCar to double down on its global ambitions.
Just in 2012 alone, BlaBlaCar expanded into Italy (by acquiring PostoinAuto.it), Benelux (Belgium, The Netherlands, and Luxembourg), Portugal, as well as Poland. On top of that, the platform released an Android and iOS app in June. As a result, BlaBlaCar was able to triple its user base to 3 million.
The expansion theme continued well into 2013 and 2014. In April 2013, BlaBlaCar launched in Germany where it faced stiff competition from local champion Carpooling.com which claimed four million members at the time (in fact, one million more than BlaBlaCar).
Whenever BlaBlaCar expanded into a new country, it did so by opening a local office. This allowed the company to adapt its page to the specific preferences of the country it was operating in. The same approach was previously championed by many other transportation platforms, including the likes of Bolt or Uber.
The firm’s most important expansion to date occurred in January 2014 when it acquired Podorozhniki, a Russian carpooling platform.
The acquisition, which added a significant number of new users, allowed BlaBlaCar to surpass Carpooling.com as Europe’s leading carpooling platform. At the time, BlaBlaCar claimed six million members compared to Carpooling’s five million.
The firm’s continuous ascend eventually allowed the team to raise the largest-ever funding round for a French startup. In July 2014, BlaBlaCar announced that Index Ventures (with participation from existing investors Accel Partners, ISAI, and Lead Edge Capital) poured $100 million into the business.
Naturally, the capital injection enabled BlaBlaCar to further expand its platform. Two months later, it opened its doors to customers in Turkey. At the turn of the new year, in January 2015, it launched in India, its first non-European country. Subsequent launches in Hungary, Romania, Croatia, and Serbia followed in March.
In April 2015, BlaBlaCar was able to solidify its position as Europe’s leading carpooling platform when it acquired its fiercest competitor Carpooling.com for an undisclosed amount. The acquisition enabled BlaBlaCar to reach the 20-million-user milestone. That same month it acquired Carpooling, BlaBlaCar also expanded into Mexico.
All of its acquisition and expansion efforts were supported by another massive fundraise, which the company announced in September. Insight Venture Partners and Lead Edge Capital, with participation from Vostok New Ventures, invested $200 million into BlaBlaCar. The funding round valued the platform at $1.6 billion, which officially made it a unicorn. By that point, 25 million people were registered on the platform.
Throughout 2016, BlaBlaCar’s focus was put towards engraining itself into Russia, one of its biggest and fastest-growing markets. In September, it raised €21.3 million from Baring Vostok, a leading Russian private equity firm. The company, furthermore, partnered with local search engine Yandex to enable online payments on BlaBlaCar.
Despite the firm’s continuous expansion, it also had to undergo some significant changes along the way. In October 2016, long-time CEO Mazzella stepped down from his position to become BlaBlaCar’s executive chairman. His replacement became Brusson, who as previously mentioned acted as the firm’s COO until that point.
For 2017 and beyond, BlaBlaCar’s focus shifted from expansion at all costs towards becoming a more sustainable operation. Instead of launching in new countries, the platform began to focus on profitability in its existing markets, for instance by launching other revenue-generating products.
As a result, it launched BlaBlaLines (now BlaBlaCar Daily), a service for daily commuters, in May 2017. It also announced a partnership with Google, which included BlaBlaCar as a transportation option within its Maps app.
The next year, BlaBlaCar also added the option to lease cars through its platform as well as the ability to purchase insurance coverage as a driver on the platform. It also continued to double down on Russia by acquiring Mail.Ru’s BeepCar, another competing carpooling platform.
However, the biggest news of the year came in November when BlaBlaCar announced that it would acquire Ouibus, the bus division of France’s national railway company SNCF. As part of the acquisition, SNCF also invested $114 million into BlaBlaCar.
The acquisition and funding allowed BlaBlaCar to enter a new transportation vertical: long-distance bus rides. The move, which greatly expanded the available routes on its platform, also put it in direct competition with German powerhouse FlixBus.
BlaBlaCar doubled down on the bus vertical when it acquired Busfor, a Ukraine-based platform, for an undisclosed amount in September 2019. At that point, around 80 million people were registered on its far-reaching transportation platform.
Unfortunately, the next year proved to be BlaBlaCar’s most challenging one. The coronavirus pandemic led to a global slowdown of travel, which in turn greatly decreased the demand for international travel.
Luckily though, a few of its markets, namely Brazil, Mexico, India, or Ukraine, remained fairly open and thus allowed the company to remain in business (growth only decreased by about 30 percent in the end).
To take advantage of the reopening across the world, BlaBlaCar raised another $115 million in April 2021.
The funding round valued its business at $2 billion. The company has its sight now set on the public markets and plans to go public somewhere in 2022 or 2023.
Close to 1,000 people are now employed by BlaBlaCar, which continues to operate local offices across the globe.
How Does BlaBlaCar Make Money?
BlaBlaCar makes money via service fees, revenue sharing with bus operators, referral as well as subscription fees.
Let’s take a closer look at each of the firm’s revenue streams in the section below.
The bulk of the revenue that BlaBlaCar generates comes from the service fees that it charges to passengers. Consequently, drivers get to keep what they charge.
BlaBlaCar collects the service fee to provide passengers with 24/7 customer support, driver verification, and even more destinations.
The service fee is dependent on the total amount that the driver himself/herself charges. For instance, rides between £47 to £51 will cost £7 while anything above £79 will incur a fee of £0.89 plus 9.9 percent of the amount that the driver is asking.
Much like its long-distance rides, BlaBlaCar also charges a fee for its commuting product (BlaBlaCar Daily).
However, given that the distances and prices charged are comparatively low means that the fees that the platform charges are also substantially smaller.
Apart from driving in someone’s car, members also have the opportunity to travel in a BlaBlaCar-branded bus (called BlaBlaBus).
The vast majority of the buses that are available are actually not owned by BlaBlaCar though.
Instead, the company partners with local bus operators who then redesign their fleet to fit the company’s corporate identity.
BlaBlaCar and the bus company then share the fare between each other. The actual revenue share percentage is not being publicized. Competitor FlixBus, for reference, charges its partners between 25 to 30 percent.
While the bus operator may earn less per ride, it ends up profiting from the millions of users that it now has access to. As such, its fill rate is greatly increased, which in turn increases their overall revenue.
Another source of revenue for BlaBlaCar comes from the car insurance policies it offers in cooperation with L’olivier Assurance.
Drivers on the platform can insure themselves against a variety of damages, including civil liability, broken glasses, storms, and other weather occurrences, theft, and more.
BlaBlaCar generates income from its insurance product through referral fees that its partner, L’olivier, pays them. These fees are paid whenever BlaBlaCar is able to sell a policy through its platform.
BlaBlaCar is able to provide quotes within five minutes. Much like its U.S.-based counterparts, which include Root Insurance, for example, it is able to minimize risk by using a variety of data points such as the distance driven on its platform as well as the reviews drivers have received.
In April 2021, alongside the announcement of its $115 million funding round, BlaBlaCar also completed the acquisition of Octobus.
Octobus is a Ukraine-based software platform that allows bus operators to digitize their various processes.
In turn, the company charges a monthly or quarterly subscription fee. It offers three plans, namely Basic, Smart, and Pro, which all come with a different set of features.
Apart from giving BlaBlaCar an additional (and potentially high-margin) revenue stream, it can also use Octobus’ existing contacts within the Eastern European region to expand its own fleet of available buses.
The BlaBlaCar Business Model Explained
The business model strategy that BlaBlaCar pursues is to create a three-sided marketplace that it horizontally integrates in.
At the center of that business model stands the C2C carpooling marketplace it has built. This became the growth engine from which it would expand upon.
One of the keys to the firm’s rapid growth was to stay away from charging drivers and instead solely levying fees on passengers.
That way, BlaBlaCar was able to attract a substantially greater number of drivers, which in turn equaled more trips and thus greater service fee revenue.
From that point onwards, BlaBlaCar horizontally integrated into its own C2C marketplace by offering bus rides as well.
Together, the two business lines created a symbiotic relationship by promoting a new set of travelers to each other.
Now, passengers had even more options to complete their whole trip with BlaBlaCar, which meant both business lines could extract value from the same customer and journey.
And there wasn’t as much risk involved, either. After all, the buses are not run by BlaBlaCar itself but local operators. BlaBlaCar just acts as their promotional layer.
Interestingly, competitor FlixBus adopted a fairly similar strategy by horizontally expanding into trains after dominating the European bus market.
BlaBlaCar has since extracted even more value from participants in its value chain, namely drivers and bus operators.
For example, it also makes money from drivers who purchase its recommended insurance. Meanwhile, it monetizes bus operators by selling software to them (= Octubus).
Going forward, it can be expected that further market expansion is still a possibility, especially considering FlixBus’ successful foray into the United States.
It remains to be seen whether BlaBlaCar will continue to horizontally integrate into other money-making opportunities such as trains or taxi rides.
BlaBlaCar Funding, Revenue & Valuation
According to Crunchbase, BlaBlaCar has raised a total of $563.5 million across seven rounds of venture funding.
Notable investors include Insight Partners, Accel, Index Ventures, Lead Edge Capital, Baring Vostok Capital Partners, and many others.
BlaBlaCar is currently being valued at $2 billion after raising a $115 million convertible note back in April 2021.
Given that BlaBlaCar remains in private ownership, it is not obligated to share revenue figures with the public. It may opt in to do so during a future funding announcement or when it is going public.