StayZilla looks to consolidate top position with 18,000+ stay options across 1200+ destinations

17th Nov 2014
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Starting an Internet business back in 2005-06 wasn't the same as it is today; it was considered impossible back then. In early 2006, Yogendra, a college dropout, understood that his passion for code would lead him to glory. Along with his backbencher friends at college, Sachit Singhi and Rupal Surana (who didn’t dropout), he believed that the fragmented ‘stay’ market could be structured and brought online.

This Chennai-based startup was started under the name of Inasra.com but then the founders rebranded it to StayZilla – stay in every ‘zilla’ (district) — in 2010. Today, you see StayZilla branding across all major airports either in form of ad banners or luggage tags. In 2005, the trio was thinking about launching either a marketplace for real estate or aggregation of accommodations across hotels in India, but they finally concurred on accommodation aggregation and launched Inasra, today known as StayZilla.


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The team initially raised half a million seed round from Indian Angel Network and later did a Series A round with Matrix Partners. They are trying to raise more money to fuel their growth in the coming months. Prior to raising the seed round, the team was bootstrapped with savings of founders for almost five to six years. This was accompanied with their early days of profitability that gave them stable support.

Locating a budget stay in India has always been a very tiresome errand for travelers and tourists. It becomes more complex when you have to visit tier II or tier III cities where not many lodges or hotels have online presence and the major OTAs or marketplaces don’t have them listed. The thing about StayZilla that needs to be appreciated is its relentless focus on tier II and lesser-known towns. They want to ensure that travelers can easily search and choose thousands of affordable hotels across India.

The growth numbers

StayZilla has 18,000+ stays, which includes guest houses, hostels, hotels, resorts, and lodges, listed on their website.These stays are spread over 1200+ cities across India. On an average, the team is clocking 3000+ room queries per day and has almost 1000+ bookings successfully accomplished daily.

We expect to double our business within the next six months. We would like to extend our India footprint further in the months to come.

Compared to its competitors, StayZilla is leading the race by more than 10 folds.

Building a team that believes and challenges your vision is the ultimate thing every founder wants in his entrepreneurial journey.

Team building has been an enlightening experience thus far. We recruit primarily on attitude and second on skills since I am a firm believer that skills can be coached, attitude cannot.


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Initially based in Chennai, the team has now put together another office in Bangalore with fresh hires to fuel the growth in the coming four-five months. StayZilla is scaling its teams rapidly and will have more than 500 employees in the next six months time. They are currently scouting talent for all their primary teams, including tech, product, design and marketing.

Read more : How they built a marketplace in 2010 when e-commerce itself was very naïve in India?

Things that worked

The holiday stay marketplace has always been a hot market for entrepreneurs and investors. Every analyst has noted the increased spending power, especially on travel and holidays, of an average Indian household. But not many players have been able to achieve the scale at par with StayZilla.

We have a high percentage of unique properties that give users a wide choice. Our best in class concierge service handholds customers through all aspects of the stay lifecycle post the online booking stage.

One of the prime reasons for the moderate success of foreign players is their approach. For an AirBnB-like stays marketplace, it becomes very difficult to go behind budget and value segment, as it requires more efforts than the luxury and metro stay options. One-size fits all approach won’t work here in India given the diversities that co-exist in harmony.

Our ability to liaise between the customer and property, and seamlessly handle even complex/ custom orders and customer requests through our concierge service makes the experience hassle free not just for the customer but for the property owner as well.

Over the years, the team has been curating the marketplace and refining partnerships, concierge service offerings and strengthening their marketing muscle.

Lessons from the entrepreneurial journey

Today, dropping out has become sexy but that wasn't the case back in 2005 when it was not the done thing. Yogi and his team have seen several ups and downs in their journey and have tried their best to evolve and stay ahead of their problems.

The StayZilla journey has been a roller-coaster ride. It promises to be even more thrilling and fun as we head towards our next round of funding, our next round of exponential growth, and several giant steps closer towards India ‘stay’ segment domination. Our path has been strewn with hidden land mines which could have stamped us out during our initial days. However, through sheer effort, strong mentorship, robust domain awareness, and presence of a great team, we managed to avoid most of the pitfalls.
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Fund raising

Most entrepreneurs are confused on various aspects associated with fund raising – the timing, from whom, and how much.

Yogi shares his reasons for raising funds for StayZilla,

VC funds were flowing into India and the e-commerce biggies had managed to successfully grease the wheels of the industry bringing millions of users online. Smartphone penetration was rising and so was the online travel sector with even online bus ticketing gaining traction. The timing was right for us, we raised an angel round of funding from IAN in 2012 and a year later raised series A from Matrix Partners. Our hunch was right, the timing of the funding was perfect, and our marketing investments bore fruit. We saw exponential growth the year following series A.
Working with Matrix Partners

Yogi states,

They have been more like business partners/ mentors and not typical VCs. It has been a wonderful experience in totality. They have helped enforce a level of process focus and brought in different wider perspectives to our current way of thinking. They have made some excellent suggestions that allowed for cross-pollination of ideas across functions and better inter-departmental information handshakes.

After raising the Series A round from Matrix Partners almost 12 months back, Yogi believes it has been one of the most significant achievements for the team.

I am the best computer engineer in the country who hasn’t graduated.

This statement from Yogi formed the first impressions on Avnish Bajaj, Co-founder and Managing Director, Matrix Partners, India about him. It not only reflected Yogi’s confidence, but his desire to succeed.

Related read: Avnish Bajaj shares the secrets to scale online marketplaces in India

Avnish further shares,

Stayzilla team’s perseverance to seed the ‘stays’ market without losing focus and getting distracted to other sectors – air, train or bus ticketing — speaks for their intent. The team has grown really well over the years with their listings and has extensively expanded across geographies.

Avnish has been one of the early Internet entrepreneurs in India. He had started an online marketplace, Baazee.com, which was later acquired by eBay.

Advice to fellow entrepreneurs
  1. Never give up, believe in your core strengths, build a difficult to replicate USP, focus on capital efficiency and don’t rush towards scale.
  2. Don’t rush to raise funds, work on your fundamentals and make sure the market is ready to receive your product at scale before raising funds.
StayZilla’s road map

Redbus till date has been a great example of how Phanindra and his team got thousands of agents first online and then capitalized that to create a bus ticketing commerce company around it. They solved the problem of getting inventory online with their Boss system helping agents with their inventory management.

In a way, StayZilla also has been doing the same in a distinctive market with the guesthouses, lodges, stay owners, hotels and resorts across different tiers in India. Their ‘concierge’ feature is a brilliant step towards acquiring new vendors and hand holding their travelers. Concierge helps customers (travelers and tourists) through all aspects of the stay lifecycle post online booking of the experience.

Customers don’t have to worry about any possible changes from the guesthouse side. StayZilla team will give you a call informing you about your booking status two days and two hours prior to your check-in into the guest house; in case of any discrepancy, their team steps in to resolve it. This feature is surely bound to give consumers an end-to-end hassle free experience at any ‘stay’, whether or not they are listed at StayZilla. There lies the real strategy for the team as this also acts as a vendor acquisition mechanism.

Ask Yogi about milestones for StayZilla in the coming years, and he candidly shares,

Establish the brand to become Indian market leader with increase in business to 10,000 RNs/ days and then go international.

Another thing on the cards for Yogi and his team is to empower house owners to rent their vacant single rooms on StayZilla. He is sure that this would be launched within the next quarter. This will be a major feature add-on to the current offerings, as it would mean a direct competition with the likes of AirBnB in the Indian market.

Website: StayZilla

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