A lottery, some perspiration and a dream to create a backpacker hostel chain: Zostel

Zostel_logo“Even my grandfather was an entrepreneur,” Dharamveer Chauhan, an IIM Calcutta student, tells us over a phone call. “I am contradicting myself by doing an MBA but a few turn of events led me into the course. I, along with my co-founders have opted out of placements and are working to make Zostel big,” he continues. Zostel is an ambitious effort by a bunch of graduates from pedigree universities to create a hostel chain for backpackers. The bigger vision is to make a dent in the hospitality industry in India.

The sapling

Dharamveer has been a motivated person right from his early days when he wanted to make games; to the hustle in college; to starting up Zostel. “My dream was to enter into the gaming industry and I also interned with Zynga but realized India is not a place to be working if you’re into gaming,” he says. Alongside this internship, Dharamveer also interned at a couple of companies in Europe which gave him many opportunities to backpack.

When he returned to India, he realized the huge potential with hostels here. “There is a lot happening in terms of technology to make travel planning better but if you look at on-the-ground activities, there is not much,” says Dharamveer. The only options a traveller has are either a high-end hotel or a cheap lodge. The whole concept of hostels that exists in the West is missing here. And this is how the idea for Zostel came about.

Zostel

4 of the team members at IIM Calcutta

The lottery and the inspired team

Being an avid gamer, Dharamveer would also try his luck at games which had a prize component like gambling. Honing his skills, one lucky day, he went on to make $ 10,000 which gave him the capital to start experimenting with and implementing his ideas. He shared his ideas with some of his close friends, who went on to co-found Zostel with him. These include Paavan Nanda, Akhil Malik, Tarun Tiwari (IIM-C), Chetan Singh Chauhan (IIT-BHU,  managing Jaipur Property), Abhishek Bhutra (IIT-BHU, managing Jodhpur Property) and Siddharth Janghu (Ex- JP Morgan). All of them have put in all they had, in terms of effort and capital to make Zostel a reality. “We’re all employees and we’re all co-founders. There is a supremely high level of energy in the team and at this pace, we’re sure we’ll be achieving our targets in the hospitality space,” shares Dharamveer. The team has overseen the construction of the buildings and the initial feedback that has been coming in from the travellers. And the aim is to become better as they keep growing.

What next?

Considering Dharamveer is from Jodhpur, the first hostel came up there and the second one in Jaipur. The idea is to give secure, hygienic, well located and cheap accommodation to travellers in India. Both the hostels are up and running now with a capacity of 26 beds each. The traction has been good and the team is gathering some valuable feedback to setup the unit economics. “We’ve invested all we had and we will make these two properties click. For scaling up, we’d be talking to investors,” says Dharamveer. Zostel also participates and wins in some top notch business plan competitions which brings in extra cash. Being global competitions, they also give the team members the opportunity to travel more and see more.

This is a very bold business and a commendable effort. The market is wide open but most don’t enter owing to the red tape and huge capital investments. It would be worth keeping an eye on how these youngsters progress.

Check out Zostel and their launch video here:


Jubin Mehta

Jubin Mehta

Jubin is an old timer at YourStory. Deeply entrenched in the Indian startup ecosystem, he has written about more than 1000 startups. With an engineering background and a keen interest in data analysis, his passion for writing and entrepreneurship makes him a perfect match for Yourstory. He operates from the mountains in Dharamshala where he also runs a hackbase. He can be reached on Twitter @jub_in and on mail at jubin@yourstory.com