Treebo Hotels, a budget hotel chain operator, has today announced raising about ₹226 crore ($34 million) in a fresh funding round. The funding round was led by Hong Kong-based hedge funds Ward Ferry Management and Karst Peak Capital.
The company’s existing investors — Bertelsmann India, SAIF Partners and Matrix Partners India, have also participated in this latest funding round.
Prior to this Series C funding round, the company had raised around ₹112 crore in a funding round in July last year. That round was followed by a venture debt round of $2.5 million from InnoVen Capital.
The company has not disclosed its latest valuation or the stake currently held by investors. However, reports were making rounds since the last couple of months regarding its talks with Ward Ferry Management for funding.
Founded in 2015 by Sidharth Gupta, Rahul Chaudhary, and Kadam Jeet Jain as Zipotel, the chain has since been re-branded as Treebo Hotels. Similar in concept to its bigger rival Oyo Rooms, Treebo aims at providing quality, yet affordable stay to those who are always on the go.
The company partners with small and standalone hotels to help them improve their service quality standards and also market themselves more effectively. While the company’s commission structure is unknown, it is speculated to be charging around 20%-2% commission per booking.
Treebo currently claims to be managing about 300 properties, or 7,000 rooms, across 53 cities. With new capital coming in, the company is expecting to double the number of properties and rooms under management over the next 12 months.
India’s still-nascent, yet fast-growing budget hotel segment has seen a significant amount of funding being raised by all the major players operating in the space, including Oyo, Treebo, and Fab Hotels.
While Oyo Rooms is currently focusing on its flagship offering — Oyo Townhouse, Fab Hotels has recently secured around ₹160 crore ($25 million) in its Series B funding round.
Apart from the startups, well-established and dominating players in the online travel booking market — MakeMyTrip, Booking.com and Expedia, etc. have entered into the race to take on the likes of Treebo, Fab Hotels and Oyo.