Optibus raises $40 million for AI that optimizes bus routes
Real-time transit can be a real dilemma for municipalities that lack digital infrastructure. Things like routes, timing, and asset management are challenging to optimize without a computerized backbone to move 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, they aren’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, in the process reducing costs by up to 15 percent. The company today announced that it’s 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,” Ross Devor, managing director at Insight Venture Partners, said. “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 and a $12 million Series A round in November 2017, and the appointment of Leon Daniels, the former head of buses and surface transportation at Transport for London (TfL), this fall as an advisor. In the months since the Series A, Optibus says it’s 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, claims that sales have grown by 400 percent.
Amos Haggiag, cofounder and CEO, 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.”
In addition to generating timetables that cut costs and save time, Optibus’ platform can model constraints, operational preferences, and regulatory requirements across multiple many vehicles, enabling fleet managers to explore “what-if” and worst-case scenarios in a simulated environment. It’s wholly cloud-based, with a dashboard that allows operators to define transit networks and set routes, checkpoints, and other variables as they please, and to view the projected impact on service and operating costs in real time. And thanks to sophisticated machine learning algorithms that account for both vehicle and driver schedules, it can automatically suggest scheduling changes likely to increase on-time performance.
Optibus earlier this year launched a new product — OnTime — targeted squarely at transit agencies. Like Optibus’ other software-as-a-service (SaaS) offerings, it analyzes historical operational data from GPS systems and other external sources to isolate factors greatly impacting on-time performance, such as rush hour traffic, driver behavior, and vehicle type.
It followed the debut of OnSchedule EV, an onboarding solution for electric buses that optimizes battery charging times and locations by factoring in battery types, chargers, and more.
“Although the OnTime solution was initially designed to help transit operators improve efficiencies and streamline their operations, the passengers are those who will eventually benefit from its implementation,” Eitan Yanovksy, cofounder and CTO, said. “Optibus OnTime will enable planners to easily identify areas or routes with a high probability of delay, and easily decide how to improve the service, before disruptions even start. This will reduce rider frustration, and, over time, make the service increasingly efficient and reliable.”