Kolors, a Mexico City-based startup that connects intercity bus riders with bus drivers, is acquiring B2B van pooling provider Urbvan for $12 million cash, the company shared Wednesday.
Kolors CEO and co-founder Rodrigo Martínez has said his service is like “if Uber and Southwest Airlines had a baby.” The startup partners with small and medium-sized bus operators that are already running scheduled services, thus maintaining an asset-light business model. But for a touch of luxury, Kolors puts one of its own employees on board each bus to check passengers in, accept cash payments when needed and sell snacks and drinks.
The purchase of Urbvan, which was previously owned by a Dubai-based Kolors competitor Swvl, brings a door-to-door solution to Kolors’ service in Mexico. Urbvan has a similarly asset-light business model, with over 500 vans and shuttles on its platforms and hundreds of B2B clients. The acquisition will allow Kolors to connect business travelers not just between cities, but within cities to corporate offices, business parks, factories and distribution centers.
The combined service will be available in 40 cities across Mexico. At present, Urbvan operates in 24 cities across the country, from Tijuana to Cancún.
“Not only is Urbvan in great shape, but the main reason for the acquisition was to complement Kolors’s digital mass mobility ecosystem and offer our millions of passengers complementary mobility alternatives, especially when 30% of Kolors passengers travel for work and the tickets are paid by an employer (a potential B2B client); and all of Urbvan’s passengers are potential travelers for the Kolors intercity bus ecosystem,” Martínez told TechCrunch via email.
When Kolors launches its app at the end of 2023, it will merge both its intercity and van services. Until then, the Urbvan app will continue functioning as a standalone app, according to Martínez.
The executive said Kolors used the money from an undisclosed pre-Series B round to fund the Urbvan purchase. The company also said the round doubled its valuation, which is “now in the 9-figures.”
Urbvan is already a profitable and growing business, according to Martínez, so it’s not entirely clear why Swvl would decide to sell. The company acquired Urbvan in July 2022 to expand its reach into Mexico, but sources familiar with the matter told TechCrunch Swvl has been selling off parts of its business internationally for the past year as it struggles to stay afloat.
Swvl went public in 2021 through a merger with a special purpose acquisition company, a move that has all but become synonymous with failure in the transportation industry and beyond. Lordstown Motors, Arrival, Nikola, Lucid Motors and Bird have all gone public via SPAC, and are all hanging on by a thread.
In January, Swvl issued a reverse stock split to attempt to bring its share price back up to $1 after it had received a warning from the Nasdaq. Swvl’s stock closed Tuesday at $1.03, down from its opening highs of $250 per share.
Swvl did not reply in time to TechCrunch to clarify the reason for its sale.
Meanwhile, Kolors has raised $20 million publicly and has strong backers including Toyota Ventures, Up Ventures, Tuesday Capital, Maniv Mobility and Uber co-founder Garrett Camp. The company is also riding the wave of onshoring in Mexico, or at least it hopes to.
After expanding its service with Urbvan, Kolors expects to transport more than 5 million passengers by the end of 2023. In 2024 and beyond, Kolors aims to tap even more business clients who will be coming to Mexico in droves as a range of companies, including Tesla, begin building factories in the North American country — the industrial answer to persistent COVID-19 bottlenecks, geopolitical tensions between U.S. and China, and supply chain issues associated with the Russia-Ukraine war.
Kolors estimates it will achieve over $100 million in annualized revenue within 12 to 18 months as a result of the acquisition. In the future, Kolors hopes to tap Urbvan’s existing client base to expand into the U.S. and other regions by late 2024.