Optibus raises $40 million
Real-time transit can be a dilemma for municipalities that lack digital infrastructure. Things like routes, timing, and asset management are challenging to optimize without a computerized system for moving the necessary pieces — or busses, as the case may be — into place. Moreover, with the number of heavy-duty transit buses expected to surpass 57,700 in countries like China by 2022, the task isn’t likely to get easier anytime soon.
That’s where Optibus comes in. The four-year-old Tel Aviv startup took three years to develop the artificial intelligence (AI) that underlies its core product: a web-based transit operations solution that helps plan and schedule the movements of drivers and vehicles, reducing costs by up to 15 percent in the process. The company today announced that it has raised $40 million in a Series B funding round led by Insight Venture Partners, with a strategic investment by Alibaba.
Existing investors, including Verizon Ventures, Pitango Venture Capital, New Era Capital, and prolific venture capitalist Sir Ronald Cohen, also participated.
“Dynamic transportation planning and operation will play a major role in enabling the future of transportation,” said Ross Devor, managing director at Insight Venture Partners. “Deploying autonomous or electric vehicles into large fleets or integrating new modes of mobility into existing service are essential tasks that require a unique technology stack. The Optibus platform can handle those complexities at scale, and we’re looking forward to working with the Optibus team to leverage the momentum and help bring real innovation to market.”
The infusion of fresh capital follows a $1 million seed round in January 2015, a $12 million Series A round in November 2017, and the appointment of Leon Daniels — former head of buses and surface transportation at Transport for London (TfL) — as an advisor this fall. In the months since the Series A, Optibus says it has opened offices in San Francisco, London, and Düsseldorf and expanded its presence in Los Angeles; Washington, D.C.; Austin, Texas; and more than 300 cities worldwide, with notable growth coming from North America and Europe. Additionally, it claims sales have grown by 400 percent.
Optibus cofounder and CEO Amos Haggiag says the round will drive “future product innovation” and support expansion into new and existing markets.
“Every city on the globe runs a multi-million to multi-billion dollar mass transit service, yet the operations rely on outdated software and manual practices to plan, optimize, and run transportation,” Haggiag said. “This wastes resources and delivers poor passenger service. On the other hand, rapid innovations in urban mobility are pushing transportation providers to modernize, and Optibus creates the technology infrastructure that can ensure better performance from the passenger’s point of view.”