10 Indian Hospitality Startups Attracting Overwhelming Interest
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Venture Capitalists (VCs) and angel investors today are potentially looking at investing in startups driving next-gen hospitality services in the country, by seemingly merging elements such as Hotels, Food & Beverages, Lifestyle, and even Travel.
Like the next-gen trends, technology-driven models are the key drivers of investments in hospitality as well.
Funding the Hospitality Service Ventures – the Perfect Driver for International Participation
If the recent funding trends are taken into consideration, it is clear that even international biggies potentially desire to see an empowered India as far as incubating and mentoring new startups (ventures) offering hospitality-related services is concerned.
An illustration here is the fact that India-based OYO raised as much as $10 million from China Lodging which is based out in China. This funding round was entirely led by China Lodging which itself operates a chain of hotels in China. Therefore, the international expertise and learnings of the international investor are passed on to OYO which today is a popular name as far as hotel bookings (at economy rates) are concerned.
OYO’s investors also include the likes of Japan’s SoftBank that is known to back interesting technology-driven ventures.
Yet another illustration is that of Gurugram-based Fabhotels which underwent a Series B to raise funding worth $25million, the round was led by Goldman Sachs. The startup has Accel Partners also among its investors.
The Drivers of Change in Indian Hospitality
To find out the funding scenario in 2018 with respect to Indian hospitality services, Entrepreneur India has composed a list of startups that could drive the next-gen funding and investments to solve a multitude of issues plaguing the Indian hospitality scene. Here, it is worth remembering that some of these startups are backed by international VC firms:
- OYO: This hospitality chain now spans PAN-India and covers more than 8500 hotels. USP of OYO has been its ability to generate a list of hotels, which do not burn a hole in the pockets of customers looking at staying in these. This startup covers all category of hotels right from budget up till presidential suites; whilst offering good booking deals.
As stated above, OYO raised $10million in funding from China Lodging in 2017. The startup, founded in 2013 by Ritesh Agarwal in Gurugram, has so far raised in excess of $400million in capital with nearly 20 investors having funded the venture at various stages. OYO has raised funds in as many as 8 rounds.
- Fabhotels: This budget hotel aggregator was founded in 2015 by Vaibhav Aggarwal and Aadarsh Manpuria in Gurugram. Total capital raised by this early-stage startup is nearly $35 million with investors such as Accel Partners and Goldman Sachs associated with the venture at varying funding stages. Fabhotels has also been backed by Aarin Capital that is led by Mohandas Pai.
- Colive: This Bengaluru-based seed venture, founded by Suresh Rangarajan and Sundari Rangarajan, harnesses technology to let people search (online) for branded serviced homes located close to their workplaces or educational institutions. USP of Colive is that the aggregator offers fully-furnished serviced apartments at affordable prices.
Colive, as recently as February 2018, raised $1.8million in a round led by Ncubate Capital Partners.
- Room On Call: Room On Call lets business travellers book hotels online. These bookings are technology-driven, and generally associated with deals & discounts, and are spread out across most Indian cities. The startup also works with hotels by offering expertise on infrastructure & budget management.
Room on Call was founded in 2015 in Gurugram; the venture raised $2 million in 2016 in a round led by CASHurDRIVE.
- Zomato: Popular food (restaurant) search and delivery app Zomato recently raised a whopping $200million in a Series I led by Ant Financial. The venture, ever since its inception in 2008, has managed to affect as many as 11 acquisitions and even pump in capital to Hyderabad-based TinMen in 2017. Apart from food delivery, Zomato also doubles up as a Google for restaurants and hospitality in India and the UAE.
As of now, Zomato has raised more than $400 million capital from a range of investors including Sequoia Capital and Info Edge. The food delivery service was started by Deepinder Goyal and Pankaj Chaddah in Gurugram.
- Trilyo: This Bengaluru-based startup uses AI-driven voice and chat to assist customers with a variety of queries concerning hospitality in India. Trilyo’s AI-driven platform takes care of a whole initial set of hotel processes including front desk management, and feedback monitoring; both of which are vital for customer engagement and retention. This approach is aimed at letting hotels drive sales whilst managing customer preferences with the same level of priority.
The startup also works on a data-driven model where analytics are used to track customer preferences (with respect to hospitality services), and generating customized offers in a bid to achieve customer retention.
Very recently, Trilyo raised $250,000 in a fresh round of funding led by Pulse Venture Capital. With this round of funding, Trilyo’s overall capital raised amounts to more than $250,000 considering the fact that the AI-driven startup raised undisclosed funding in 2016.
- Zostel: Zostel is a chain of backpacker hostels in India operating in 25 Indian cities, and in Nepal. These are ideal for backpackers travelling for adventures and fun. This venture lets travellers stay in hotels at picturesque locations; USP is its service model that offers authentic local experiences to explorers at reasonable costs.
Zostel, founded in 2013 in Jaipur, has raised $1 million in capital. The last round of funding was in 2014.
- Goomo: Not an essential startup, but still considered a major player in the hospitality sector by analysts and investors, Goomo was the leader in 2017 among other ventures to have raised private equity worth $50million. The lead investor was New Delhi-based Emerging India that pumped in $50 million.
As far as its services are concerned, Goomo is a travel-tech company targeting leisure travellers, corporate, and the B2B sectors in India. Goomo lets people obtain customized travel and stay options, through data-analytics.
- ZiffyHomes: This startup founded by Sanchal Ranjan, Sallil Agarwal, and Saurabh Kumar in 2015; raised INR 2 crores in angel investment during a round in January 2018 led by angel investor Bikky Khosla of TradeIndia.
ZiffyHomes uses data analytics and artificial intelligence to enable customers to find homes on rent online.
- Treebo Hotels: Bengaluru-based Treebo Hotels is a technology-driven accommodation booking platform through which customers can track affordable hotels across India. This startup founded in 2015 by Rahul Chaudhary, Kadam Jeet Jain, and Sidharth Gupta.
Treebo raised $34 million in 2017 in a Series C lead by Ward Ferry Management and Karst Peak Capital. With this round, Treebo’s total raised capital amounts to $57 million, with as many as 5 investors including the likes of SAIF Partners, and Matrix Partners.