Budget hotel chain Treebo to raise $2.98 mn in growth funding round

Budget hotel chain Treebo to raise $2.98 mn in growth funding round
Photo Credit: Pexels
26 Jun, 2020

Bengaluru-based Ruptub Solutions, which owns and operates budget hotel chain Treebo, is in line to raise $2.98 million (Rs 22.5 crore at current exchange rates) in a growth funding round from returning investors, including German firm Bertelsmann’s India investment unit, Matrix Partners India and SAIF Partners.

Treebo will issue 1,878 Series D1 preference shares to Bertelsmann Netherlands, Matrix Partners India Investment Holdings II and SAIF Partners India V at Rs 1,19,853 per share, as per regulatory filings. The share issue was approved by Treebo’s shareholders on June 20.

The company will use the fresh funds to fulfill its business plan and for other corporate purposes, filings with the Ministry of Corporate Affairs showed. 

The capital infusion comes two months after the company culled jobs across all functions and paid its staff under the voluntary resignation scheme (PVRS), citing tough business climate in the travel industry due to the Covid-19 pandemic. However, this was not the first time the company has handed pink slips to its employees. In 2019, Treebo laid off about 20% of its 750-strong workforce on account of financial distress caused by intense competition. 

In January, it raised $457,748 from media conglomerate Bennett Coleman (BCCL) through an equity share and warrant issue. Prior to that, the company received $34 million in a Series C round from Hong Kong-based hedge funds Ward Ferry Management and Karst Peak Capital, along with returning investors.

In 2016, media company Bertelsmann, along with existing investors SAIF Partners and Matrix Partners, infused $16 million in a Series B round in the company.

Treebo was founded in 2015 by Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Jain. The budget hotel chain manages over 10,000 rooms across more than 95 cities such as Mumbai, Pune, Chennai, Kolkata, Bengaluru, Hyberabad and Ahmedabad. In August, Treebo launched Hotel Superhero, a platform to onboard mid- and small-scale hotels.

In financial year 2018-19, Treebo posted a 66% jump in revenue to Rs 68 crore while maintaining losses at Rs 118 crore, compared to Rs 114 crore in the previous year.

Treebo competes with companies such as OYO, MakeMyTrip, ClearTrip, Yatra and FabHotels. In January, FabHotels was looking to raise $5.5 million in an ongoing Series B round from returning investors Goldman Sachs, venture capital firms Accel and RB Investments.

Comment(s)