graphical user interface, text, application, chat or text message: Busbud allows people to find and book intercity bus tickets in more than 80 countries around the world.

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Busbud allows people to find and book intercity bus tickets in more than 80 countries around the world.

A “growth” fund bankrolled by Canada’s biggest financial institutions has made its first investment in Quebec by participating in a $15-million round of funding for Montreal-based bus travel booking website Busbud Inc.

The Canadian Business Growth Fund, as well as Quebec government-owned Investissement Québec, led a Series C equity financing that was announced on Tuesday for Busbud, which was founded in 2011 and allows people to find and book intercity bus tickets in more than 80 countries around the world.

“Despite the obvious effect that the pandemic has on Busbud’s travel-focused industry, we believe the business has the opportunity to come out of the pandemic stronger than before and will use this time to grow and continue to build its team and improve their platform,” said George Rossolatos, chief executive officer of the Canadian Business Growth Fund, in an email.

Busbud says the funds from the Series C will go towards the company’s technology, expanding its 50-person workforce and growing the number of markets that it serves. Currently, around 90 per cent of the company’s business is spread across North America, Latin America and Europe, with its website and app allowing customers to shop for bus tickets from more than 3,900 bus companies in 16,000 cities.

“It’s a fundamental need to travel from Point A to Point B for a lot of people, whether that’s for work, school or even to take care of other people,” Busbud CEO and co-founder Louis-­Philippe “LP” Maurice said in an interview. “So we want to make sure they’re still able to move around.”

Busbud is paid a commission for its services by the bus operators, such as Greyhound. The company has also sprinkled in some train travel and car-sharing to its travel options, Maurice said, and added a cancellation-insurance feature that’s proven popular during the pandemic.

Although COVID-19 has taken a toll on the travel business — and a second wave is washing over some places — Busbud says its pre-pandemic revenue was growing at a 110-per-cent rate year-over-year. It also sees its efforts to diversify the countries in which it operates and the services it offers as allowing for further growth.

Maurice said Busbud has been seeing a “pretty steady recovery” in most markets over the past 12 weeks as well, and that bus operators have enacted various COVID-19-related health and safety protocols.

“We’re really, really confident that we will be able to weather the storm,” Maurice said.

The Series C for Busbud also comes as the coronavirus pandemic continues to put financial pressure on firms and make for an uncertain global investing environment. That environment is making it harder than normal for small and medium-sized companies to grow into bigger firms, which was a pre-existing issue in Canada.

The CBGF was launched in 2018, following work done by the federal government’s Advisory Council on Economic Growth, which found many Canadian companies weren’t growing after they reached a certain point. And Rossolatos says that, at the moment, some investors have had to focus on their existing portfolio or hold off on additional deals.

“However, the growth capital gap in Canada has become much larger as a result of the pandemic,” he said. “At CBGF, we have chosen to ‘lean in’ to support entrepreneurs where we could.”

The Toronto-based CBGF, which is backed by 13 of Canada’s biggest financial institutions, started out with capital commitments of $545 million from shareholders such as Royal Bank of Canada and Manulife Financial Corp. The fund typically shoots for investments of between $3 million to $20 million in established Canadian companies, taking minority ownership stakes in them in return.

CBGF has now invested $137.8 million in 15 companies, including seven investments made during the pandemic,  Rossolatos said.

“We believe there is scope to further grow our fund size amongst current and potentially new institutional investors,” he said. “The growth capital gap in Canada continues to expand and CBGF has an opportunity to make an even more meaningful impact in the coming years.”

CBGF was joined in the Busbud investment by Crown corporations Export Development Canada and BDC Capital, as well as by Singapore-based K3 Ventures. Previous Busbud investors Inovia, Plaza Ventures, and Claridge also took part in the Series C, which increased the company’s total fundraising to date to $40 million.

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