Budget hotel aggregator ZO Rooms secures funding led by Tiger Global, Orios Venture Partners

20th Jul 2015
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Low-budget hotel chain ZO Rooms, has secured an undisclosed amount of funding led by Tiger Global, with participation from Orios Venture Partners. The company will use funding primarily for building a strong team and business expansion.


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ZO Rooms enables users to book rooms through a mobile-app which geo-detects a location and books into the nearest ZO Rooms available at a single touch. Talking about current traction, Paavan Nanda, Co-founder, Zo Rooms said,

We are sitting on 400 hotels across 30 cities and have grown 6X over past 60 days.

The company claims to be the only hospitality service provider in the world in the budget segment that has tablets installed at each property to record instant feedback and immediately address the issues.

The brainchild of Zostel founders, ZO Rooms aspires to emerge as the go-to brand for any person planning to stay outside home. Paavan added,

A good portion of funds would be allocated to technological innovation as well as brand building initiatives.

Currently, India is short of 1,50,000 budget hotel rooms, and it’s a $20 billion plus opportunity, growing at a high double digit rate. A good portion of this demand is fuelled by the emerging tier II and III cities where there is a severe dearth of quality accommodation.


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Besides Zo Rooms, Stayzilla, Oyo Rooms, Zip Rooms, Treebo and Awesome Stays are some of the key players in budget hotel aggregation space. Oyo Rooms has snapped up $25 million round from Lightspeed Ventures, Sequoia Capital, Greenoaks Capital and DSG Consumer Partners while Stay Zilla had raised $20 million round from Matrix Partners.

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ZO Rooms was trying to raise funds from some time and this round will equip it to scale quickly and compete with rivals Oyo Rooms and Stayzilla. The budget hotel segment is witnessing significant traction from the last one year. However, maintaining quality in service delivery and building strong bonds with small hoteliers are key challenges.

The budget accommodation segment has great potential given the surge of demand in budget hotels (significantly in tier II & III cities). In the future, it would be interesting to watch how these players evolve. Stay tuned for more updates in this space.

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