Startup

Treebo Hotels raises $16 million in Series B funding round led by Bertelsmann

Treebo Hotels, a chain of budget hotels based out of Bengaluru, has raised $16 million (Rs. 112 crore) in Series B round of funding. The investment round was led by Bertelsmann India Investments (BII), the Indian arm of Germany’s Bertelsmann SE & Co. KGaA.

SAIF Partners and Matrix Partners India were the other investors that participated in the funding round. Treebo plans to use the capital to expand its rooms from 3,000 to 12,000 across 450 properties in the next 12 months, the Economic Times reported.

At present, Treebo has 125 hotels in 25 cities across the country. The destinations of the new budget hotels in new cities would be for both corporate guests and leisure travellers, Mint reported.

Treebo is also looking to launch two brand extensions – a mid-scale brand and a leisure brand. However, it will maintain its purpose of providing budget hotels, with clean linen, free Wi-Fi, complimentary breakfast, to travellers. It also provides branded toiletries, complimentary beverages and other services at these hotels.

“Treebo is serving a huge unmet need in the budget travel space—that of reliable and affordable accommodation. Over the last one year, they have maintained razor-sharp focus on delivering a great guest experience, and have extensively deployed technology in all parts of their operations to accomplish this objective,” Mint quoted BII Managing Director Pankaj Makkar as saying.

“We are excited to partner them in a journey towards building the most loved consumer brand in the hospitality space,” Makkar said.

Founded by former Myntra executives Sidharth Gupta and Rahul Chaudhary and MakeMyTrip’s Kadam Jeet Jain in February 2015, Treebo raised $6 million in a funding round by Matrix and SAIF in June 2015.

“When we first invested in Treebo, it was because of the quality of the founding team, and the clarity of their approach. One year later, we are really glad to see the team sticking to the same approach, and seeing success with it. Treebo has become a trusted partner of the hotels it works with, and has shown the way to the industry by building an experience-focused brand, which others would want to emulate,” SAIF Partners’ Mayank Khanduja said.

Oyo Rooms is Treebo’s major competitor in the market as both aims at serving the same purpose. However, Treebo is different from Oyo when it comes to owning the inventory. Treebo partners with the hotel owners to sell full inventory, while Oyo sells only a part of it.

“We believe partner success is closely linked to guest experience. We have therefore 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,” Treebo co-founder Sidharth Gupta said.

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