We don’t buy growth: BlaBlaCar Founder-CEO Frederic Mazzella

You’ll read ‘billion’, ‘unicorn’ and ‘valuation’ in the same sentence more than ever before today, especially when it comes to India’s major online transport businesses – Ola and Uber.

Ola, with a valuation of $5 billion has so far raised $1.2 billion from investors. Its biggest rival in India, Uber is the world’s most valuable start-up at $62 billion. The latter announced in July last year it would invest $1 billion in India, and the former has strong investors.

India is an important market for Uber with its lucrative market potential, and Ola won’t want to lose on its home turf. While the duo is fighting for dominance of India’s cab business, this means a lot of cash burn. In a recent interview with Business Insider, Jugnoo co-founder Samar Singla claimed he’ll do the same as long as Ola and Uber do. It’s refreshingly new to meet someone who won’t.

Business Insider got on an international call with BlaBlaCar founder-CEO Frederic Mazzella to understand his frugal method of running a transport-based business.

India as a market for BlaBlaCar
We had an ambition of introducing ride-sharing in India. More than 1 million Indians have used BaBlaCar in the first 12 months. That’s a real achievement as compared to the 22 other countries we’re in. We want to ensure our product meets the demands of the local people. That’s why we’ve introduced things like government ID proof requirement.

How do you plan to monetize in India?
We haven’t decided yet. We’ve tried several models in various markets. It can be any of those, or something else.

The most important thing for a service like ours is to reach liquidity. We’re reaching that in India on certain routes. We need to push a bit more to reach real liquidity and then monetize.

Do you have a deadline in mind for India?
There are no deadlines. We have metrics that show our service is picking up. We’ll do everything we can to finance growth in India, like in every other market we’re in. We’ve never pulled the plug on a country.

India investment plans
We’ve raised $200 million last summer. We’re using this money very judiciously.

Thanks to things like online marketing we know exactly how much we spend, and we’re very precise in our expenditure to ensure we don’t overspend on anything.

Competition from Ola and Uber
The reason you haven’t heard of coupons or discount vouchers from us is because we don’t buy growth. We have a community approach versus a pure marketing approach.

When you look at the lifetime spend of a member vs. the cost of acquisition, it’s not sane to spend more than the lifetime value of a user. That’s not sustainable.