Online travel agent startup Zo World on Wednesday said it has signed an agreement of share subscription facility from Luxembourg-based private alternative investment group GEM Global Yield, amounting up to €15 million (about $17.8 million as per current exchange rate).
The 2020-founded company, which is linked to Zostel through a partnership and common founder, aims to create a “decentralised marketplace” for travelers across the globe, using technology.
The company works with global digital nomads and helps them travel, live, and work, from several destinations across the world, starting off with India, founder and CEO Dharamveer Singh Chouhan told TechCircle.
“All of this is done with the help of community members that work all across the industry. When these people travel or they live for months or weeks at any destination, they spend on their accommodation, travel, food, experiences, and shopping.
Zo World takes a commission from everything, just like any other travel agent. Zo World has built a social layer with the help of community, where normal people are helping these transactions and earning money along the way as well,” Chouhan said.
Under the reported deal, GEM will provide Zo World with a share subscription facility for a 36-month term following the public listing of the company shares on European or other stock exchanges, as per a statement.
Zo World will control the timing and maximum amount of drawdown under the facility and has no minimum drawdown obligation, the statement added.
Concurrent to the public listing of Zo World shares, GEM will receive warrants to purchase shares of the company.
“We are not in a rush to go public any time soon. What we have signed with GEM is that we can go public anytime over the next three years. Unless things change, we have not really determined a specific timeline for us to go public,” Chouhan told TechCircle.
Having completed 400 transactions in 70 countries, Global Emerging Markets (GEM) is a $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world.
The Zo Travel platform is currently in the beta phase for early users.
Marketplace tools and WhatsApp-based communication are being used by vendors across India ranging from transport, food, and experience partners.
Zo World, due its launch early October, has licensed the Zostel brand and also signed a global Master Franchise agreement with Zostel Hospitality, the startup chain of backpacker hostels and homes.
Chouhan added that Zo World had earlier only raised a small amount of funding (undisclosed) from Blume Founders Fund, Marwari Catalysts, KhataBook founder and CEO Ravish Naresh, among other angel investors, three months ago.
Founders Chouhan and Chetan Singh Chauhan are both part of Zostel’s founding team.