Prior to this round, the company had raised a total of USD 23 million over two rounds from Matrix Partners India, SAIF Partners and Bertelsmann India Investments
Budget hotel accommodation provider Treebo Hotels on Tuesday said it has raised USD 34 million in Series C round led by Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital. Existing investors, Matrix Partners India, SAIF Partners and Bertelsmann India Investments also participated in the round.
Treebo will invest the fresh funds in enhancing customer experience, building a stronger brand, strengthening its technology team, and expanding its footprint in existing and new cities.
"Ward Ferry and Karst Peak are both seasoned investors in the global markets including in the travel and hospitality space. Between them, they have invested in hotel chains, cruise ships, OTAs, F&B chains, duty-free shops, and several other sub-segments within the space. We are glad that our approach of building a sustainable, long-term business resonated with them," said Sidharth Gupta, co-founder, Treebo Hotels.
Founded in 2015, Treebo Hotels is a budget hotel brand with close to 300 franchisees operating exclusively under its brand across over 50 cities. It offers accommodation options to travellers in Rs 1,000-3,000 per night price range.
Irrfan Khan, Treebo's brand ambassador, in a Treebo commercial.
It works with new and existing hotels where Treebo offers its brand name, access to leading vendors, staff training, and sales and marketing expertise to the property. It claims to be enabling higher revenue for the franchise partners against their previous standalone businesses.
Prior to this round, the company had raised a total of USD 23 million over two rounds from Matrix Partners India, SAIF Partners and Bertelsmann India Investments.
The company competes with Softbank-backed Oyo, which is in talks with investors to raise its next round. It last raised USD 62 million from Softbank a year ago.In the last few months, Oyo that started off as a hotels aggregator has also had a significant shift in its strategy and is experimenting with multiple models including leased properties.
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Earlier this year, it also launched a new brand of stays called Townhouse. While Oyo primarily aggregates select rooms across multiple hotel properties and customises them as per its branding, under Townhouse it is taking care of the entire property.
Smaller rival Fab Hotels last month also raised USD 25 million in a Series B funding round led by Goldman Sachs.
Not just start-ups but even Nasdaq-listed online travel agency MakeMyTrip that acquired rival GoIbibo last year, is betting heavily on the budget accommodation sector.
In an interaction with Moneycontrol recently, chief executive Rajesh Magow said that the company is targeting the hotels and packages segment to contribute at least 70-75 percent of its revenue in the next 3-4 years. It currently gets 54 percent of the business from hotel and packages and 46 percent from flights.
However, the sector also saw bloodbath with Stayzilla that also had backing from Treebo's existing investor Matrix succumbing to lack of investor interest and rise in competition and shutting shop.
The founder and chief executive of Stayzilla Yogendra Vasupal was also remanded to police custody on the complaint of non-payment of dues by vendors.In an interaction with Moneycontrol, Avnish Bajaj following the incident, managing director of Matrix Partners explained why the investors did not bail CEO out by settlement with vendor.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.