A mobile ticketing company for public transport, aiming to get rid of paper tickets across the world, has raised $12 million.
British start-up Masabi builds mobile ticketing and fare collection apps for public transit authorities including in cities such as Boston and Las Vegas. It allows people to buy train tickets, for example, via an app and lets conductors check the tickets using their own mobile phone.
Investors including Keolis, which operates public transport in 15 countries, and Mastercard were involved in the funding round. Lepe Partners and existing investor MMC Ventures, also took part in the round.
Ben Whitaker, Masabi's co-founder, said the company is aiming to save people time by getting rid of queues and paper tickets.
"We see people turning up early at a station, waiting in line, and spending a lot of time in line. We are saying let's use the mobile phone for the infrastructure so you never have to wait in line again," Whitaker told CNBC in an interview.
"As more and more people need public transit as cities expand, we don't have to spend a load of money to build bigger stations and put ticket machines in, we can just get loads of people using their phone and spend the money we save on safety and trains and buses."
Other companies such as European-based The Trainline offer mobile train tickets, while Apple Pay works on London's underground network. But Masabi says its strength lies in being able to build apps for individual operators across a number of forms of public transport like buses and trains.
Masabi recently won a contract from the New York Metropolitan Transportation Authority to run the ticketing for its commuter trains into the city. During the summer, Whitaker said the company worked with transport authorities in Greece to do ticketing for the trains. The co-founder said that there were not enough ticketing facilities while people had to use cash to pay. When there were restrictions on how much Greeks could withdraw from ATMs, Whitaker said Masabi's solution was key to helping the situation.
"They weren't in a position to use public borrowing, so by using a mobile solution they could use cost-effective Android phones for staff to check tickets and this spread like wildfire," Whitaker said.
The $12 million is going to be used on outreach, research and development and growing teams on the ground where Masabi has contracts. By bringing Keolis and Mastercard on board, Masabi will be hoping to tap into their international reach to help win more contracts with transport authorities.
"Instead of Masabi looking to become an expert in local cities, it is now possible for cities around the world to talk to local Mastercard or Keolis representatives. It means now small cities can access the New York-style ticketing system," Whitaker said.