How BlaBlaCar faced growing pains and had to change its focus

BlaBlaCar is often named as one of the most tangible examples that the French tech ecosystem has been doing well. The French startup is the global leader for long-distance ridesharing and is worth around $1.5 billion (€1.4 billion).

And just like other big tech companies, BlaBlaCar recently faced some challenges and had to define a new strategy for the coming years. In a surprisingly candid interview, BlaBlaCar co-founder and CEO Nicolas Brusson looked back at the past few months and shared everything.

The markets

In 2014 and 2015, BlaBlaCar grew massively. All the news coming out of the company were about new international markets and additional funding rounds. In just a couple of years, the startup acquired smaller competitors and launched a dozen new markets. And it raised around $300 million — a comfortable war chest.

But it turns out that not every country needs BlaBlaCar. The startup has avoided the U.S. for years, saying that gas is cheaper there, cities are too far from each other and too big to conveniently pick up and drop off people.

Russia is now BlaBlaCar’s first market when it comes to rides per month — it is bigger than France

As Capital first reported, some other bets have not paid off at all. The company had to shut down three offices — India, Turkey and Mexico. You can still book rides on those local websites, but the services have been on autopilot for a while without any local staff or advertising.

BlaBlaCar’s main markets have also slowed down. For instance, France isn’t growing as much as it used to.

“Western European markets are relatively similar,” Brusson said. “Except in the U.K. where it never really took off. It sort of works but it’s nothing exciting.”

But other countries have shown more positive signs, such as Russia, Eastern Europe and Brazil.

The Russian funding

Russia is now BlaBlaCar’s first market when it comes to rides per month — it is bigger than France. And it’s still growing rapidly. So BlaBlaCar is going to bet it all on Russia and Eastern Europe.

First, the company raised a strategic round of funding from a Russian investor at the same €1.4 billion valuation last year. Brusson confirmed that the company got €21 million from Baring Vostok, a VC firm that invested in Yandex quite early. But Baring Vostok got more than €21 million worth of shares.

“There was a lot of secondary market activity around this funding. They invested €80 million in total to buy back the shares of some of the very early investors before ISAI.”

Second, BlaBlaCar is going to spend time fine-tuning its product offering for the Russian market and Russian regulation. It has to feel like a Russian product for its local community.

Finally, BlaBlaCar is not taking any fee in Russia. In other countries, the startup has adopted the same business model as Airbnb, taking a small cut on each transaction from the driver and the passenger.

In Russia, BlaBlaCar has given up on its cut altogether while the market is still growing rapidly. A few years down the road, the company may flip the switch and start generating money from this market. But for now, it’s just a bet.

“It took us ten years in France to build the equivalent of what we built in 2 years and a half in Russia,” Brusson said.

The product

BlaBlaCar focused on geographic expansion for so long that there hasn’t been major new features for the BlaBlaCar community for a while. The company is going to change that by regularly launching new services.

“What do we do now? How do we diversify our products and our business to foster growth?” Brusson said.

And it starts with a deal between BlaBlaCar, Opel and B2B car leasing company ALD. The most active BlaBlaCar users can now lease a car using BlaBlaCar. Behind the scene, the startup has negotiated some interesting deals. With tens of millions of users, you can get a fair price for those additional services.

“Today, we start with French ambassadors, so around 300,000 people,” Brusson said. “Numbers quickly get huge. There are 8 million active drivers on BlaBlaCar, representing 1.3 million cars sold every year.”

In the future, I can see BlaBlaCar evolving into a club. If you’re an active member, you get access to everything you need to move around your country at a good price. Brusson talked about insurance products, cars, maybe shorter distance rides and even product deliveries. This way, BlaBlaCar could find new revenue streams as well.

BlaBlaCar wants to move from the traditional car ownership model to car-as-a-service.

“Eventually, what’s interesting for the most active drivers is that we could use the money you get from your rides to pay for the lease,” Brusson said. “You could be a student and pay €0 per month for your car if you regularly go back to your family.”


Back in October, BlaBlaCar co-founder and CEO Frédéric Mazzella announced that he would become Executive Chairman. Nicolas Brusson used to be COO and is now CEO.

“We formalized the structure that we’ve never really formalized during all these years,” Brusson said. “We now have a formal CEO and Fred [Mazzella] is Executive Chairman and is going to work on the innovation lab.”

The board isn’t changing and the three co-founders with CTO Francis Nappez still have board seats. I’m not sure what it means for Mazzella’s day-to-day involvement, but Brusson now seems like the person in charge of the new strategic direction.

The organizational shift

With the new focus on product features and Russia, BlaBlaCar’s priorities have changed quite a lot. And the team changes affected the entire company, not just the three co-founders.

“It’s the first time it wasn’t just incremental news. Every time we were announcing something internally, we were saying ‘we’re also going to do another thing, and another one, and another one.’ And this time we said ‘we’re going to do all of this, but we’re also going to stop doing that,’” Brusson said.

Corporate reorganizations are tough. Some teams became more important while others became irrelevant — the “New Country Team” isn’t useful anymore for instance. A few sources also told me that there was a sudden increase in job candidates coming from BlaBlaCar in the tech ecosystem in Paris.

After the reorganization, some employees chose to leave the company. But it’s just part of the story. There were some layoffs as well. Brusson didn’t give an actual number, but “dozens” of people left the company in total.

“There were some departures and some new hires,” he said. “We kept growing when it comes to total headcount.”

As for the company’s bank account, BlaBlaCar isn’t going to raise money any time soon after the previous big funding rounds.

“We don’t need to raise money at all. That’s the reason why the 2016 funding round was mostly on secondary market,” Brusson said. “If we had financing problems, we wouldn’t have swapped our investors. We’re more concerned about our dilution than our cash balance, so it means that we have enough cash.”

BlaBlaCar is taking an interesting turn, evolving beyond its simple product-market fit with new features. There’s still no clear competitor on the carpooling startup space. So BlaBlaCar can take its foot off the pedal when it comes to international expansion.

It’s the very beginning of this new strategy — it’s too early to say if it’s going to pay off. But it seems like BlaBlaCar is willing to face its own shortcomings, even if it can be painful. That’s how you grow up as a company.