Bertelsmann leads Rs 112-crore Series-B funding in budget hotel chain Treebo

22nd Jul 2016
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Bengaluru-based Treebo Group of Hotels has raised Rs 112 crore in a Series-B funding round, led by Bertelsmann India Investments (BII). Existing investors including SAIF Partners and Matrix Partners India also participated in the round.

The company plans to use the fresh round of funds for its expansion, to strengthen market outreach, and enhance its technology.

YourStory-Treebo-Hotels
Founding team @ Treebo

Founded in June 2015 by Sidharth Gupta, Rahul Chaudhary, and Kadam Jeet Jain, this technology-enabled chain of budget hotels currently has 125 hotels in 25 cities across the country.

Sidharth said, “We have built deep relationships with hotel owners by partnering with them for their full inventory, and not just a few rooms. We invest heavily in technology, analytics, quality control, and staff training to help our hotel partners. It is important for us that each and every one of our partners does well, and not just a few of them. This, we believe, is the key to ensuring a consistent, high-quality experience at all our properties.”

The company recently launched its app ‘Bumblebee’, which helps the hotels in managing their everyday operations. The company have also launched a crowdsourced mystery audit programme called ‘Friends of Treebo’, wherein registered members of this community stay at Treebo properties as its unannounced representatives, and give feedback to the company on their experience. This initiative takes care of the quality of the hotels.

Treebo now plans to expand its footprint to more than 60 cities, and quadruple its current inventory from 3,000+ to 12,000+ keys across 450 properties, over the next 12 months. Additionally, the company also plans to launch new brand extensions including a mid-scale brand and a leisure brand.

In December 2015, the company was clocking 1,000-1,200 room nights a day with an Average Room Rate (ARR) of Rs 2,100.

Including the fresh funds, the company has altogether raised Rs 150 crore.

The market scenario

With a funding of $100 million, OYO Rooms has been leading in this $20-billion market for a while now. The other significant player was Tiger-backed Zo rooms, which was acquired by Oyo earlier this year.

Bengaluru-based Stayzilla is also competing in the same space, though its business model is different.

With this fresh round of funding, the segment will now show some strong competition and bring some buzz. During the time when the ecosystem is facing challenges, especially in terms of raising funding, few players with competent business models have proven their product and have raised massive amounts, taking the game a notch higher. 

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