Bengaluru-based Treebo Group of Hotels, a chain of budget hotels, has raised Rs 112 crore in its Series B funding round led by Bertelsmann India Investments (BII). The round also saw participation of existing investors, SAIF Partners and Matrix Partners India. Pankaj Makkar, managing director, BII, said, “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 sharp focus on delivering a great guest experience, and have extensively deployed technology in all parts of their operations to accomplish this objective. We are excited to partner them in a journey towards building the most loved consumer brand in the hospitality space.”
Co-founded in 2015 by Sidharth Gupta, Rahul Chaudhary, and Kadam Jeet Jain, Treebo currently has 125 hotels in 25 cities across the country in its network. The company plans to use the fresh round of funds for furthering its expansion and strengthening its marketing outreach. Chaudhary said, “Bertelsmann is a highly respected name in the venture capital world. They are known for taking a long term view of their investments, and for supporting companies that are building sustainable, value-creating businesses.”
Explaining the model further, Gupta stated, “We pioneered the tech-enabled franchise model in the budget hotels space in India. 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. 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.”
Mayank Khanduja, principal, SAIF Partners, which was one of the early investors in Treebo, commented, “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 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.”
The latest infusion of funds takes the total capital raised by the company till date to Rs 150 crore. Investec India was the exclusive financial adviser for the company for this fundraise. 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. These cities will include a mix of business and leisure destinations. The company also plans to launch new brand extensions along the way, including a mid-scale brand and a leisure brand.
Tarun Davda, managing director, Matrix India, which co-led the first institutional round of funding in the company, said, “With its differentiated partnership model and unwavering focus on delivering a superior customer experience, Treebo has shown a tremendous ability to drive steady scale, and healthy unit economics at the same time. We are proud to see them emerge as the strongest player in this category. We welcome Bertelsmann to this partnership and look forward to building a great company together with the Treebo team.”