The holding company for FlixBus and FlixTrain is now the third-most lavishly funded travel startup in history, behind only Airbnb and Oyo. Investors see a big potential for modernized intercity bus and rail, even though many travel industry executives don't consider those sectors hip.
German transport app FlixMobility, best known for its FlixBus intercity bus brand, said on Wednesday it had raised $650 million in equity and debt financing from investors in a round that valued the business at more than $3 billion.
The fundraising will allow FlixMobility to grow as key markets in Europe and the United States emerge from the coronavirus pandemic and people start traveling more, its founders Andre Schwaemmlein and Jochen Engert told reporters.
They said FlixMobility had cut services during lockdowns but stayed in close contact with the partners that operate its branded buses and trains, so that they would now able to ramp up services quickly.
“With our asset-light model we were able to react very quickly to demand deviations,” Schwaemmlein told an online news briefing.
“The most important thing for our partners is that after the pandemic we are there for them to generate long-term revenue.”
The Series G investment round, a mix of equity and debt, was joined by new U.S. investor Canyon Partners, while existing backers General Atlantic, Permira, TCV, HV Capital, BlackRock, Baillie Gifford and SilverLake also chipped in.
Despite the pandemic, FlixMobility increased its valuation compared with the 2 billion euros ($2.44 billion) achieved in its last funding in 2019 when it attracted 500 million euros – a record for a German startup at the time.
Also on Wednesday, software company Celonis – based in Munich – raised $1 billion from investors in the largest-ever venture capital round for a German startup.
FlixMobility said it would invest the proceeds in expanding its network in pursuit of becoming market leader in Britain, the United States and Portugal, and in expanding its market lead in Turkey, France and Eastern Europe.
It will also invest in its FlixTrain services in Germany and Sweden.
(Reporting by Douglas Busvine Editing by Riham Alkousaa and Jane Merriman)
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Photo credit: A FlixBus in a European landscape. The intercity bus brand belongs to FlixMobility, which has raised additional funding. FlixMobility