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Former Myntra executives’ branded budget hotel chain Treebo raises $6 mn from Matrix, SAIF

Former Myntra senior executives Sidharth Gupta and Rahul Chaudhary, along with Kadam Jeet Jain, who founded the branded budget hotel chain Treebo earlier this year, have raised $6 million in their first round of funding co-led by Matrix Partners India and SAIF Partners. 

Former Myntra senior executives Sidharth Gupta and Rahul Chaudhary, along with Kadam Jeet Jain, who founded the branded budget hotel chain Treebo earlier this year, have raised $6 million in their first round of funding co-led by Matrix Partners India and SAIF Partners. 

According to a Times of India report, this investment comes close on the heels of the formal launch of Treebo Hotels, formerly known as Zipotel, making it one of the fastest series A fund-raises by a tech startup since inception. 

In India, Treebo will be competing with the likes of Oyo Rooms, the largest player in the market, as well as others including Zo Rooms, which is close to getting funded by Tiger Global and Fabhotels in a highly competitive market. 

“Currently, there are upwards of 10 lakh budget hotel rooms in India but 95% of them are in the unorganized segment. Despite online booking options and third-party reviews, the lack of quality assurance continues to be an unsolved problem for travellers,” Treebo’s Gupta, an IIT-Rorkee alumnus, told the Times of India. 

These accommodation startups work on an asset-light model – they partner with smaller hotels, brand them, and aim to provide standardized services to budget travellers with room rates ranging from Rs 1,000-2,000 without owning any properties. “We have an inventory of over 200 rooms in Bengaluru in just two months. This year, we will scale up to 5,000 rooms across 20 cities,” Chaudhary was quoted in the report as saying. Both Gupta and Chaudhary worked as consultants in McKinsey before joining Myntra’s core strategy team last year. 

“The biggest challenge in the highly fragmented budget hotel space is the lack of standardization. With Treebo, customers can book with confidence knowing that all their properties will have a safe, comfortable and standardized service offering at an affordable price,” Tarun Davda, Director, Matrix India, told the Times of India. 

“The model adopted by Treebo has already seen tremendous success in China, which until a decade back was an unorganized market similar to what we see in India today,” Mayank Khanduja, VP, SAIF Partners, was quoted in the report as saying. A Treebo-like business expects to get 25 to 30% commission per booking.

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