Backpacker hostel chain The Hosteller has raised $4 million (roughly Rs 320 crore) in a Series A funding round. funds round led by V3 Companies.
Existing investors including LV Angel Fund, FAO Ventures, Synergy Capital Partners, Unit-e Consulting, Ice.VC (backed by Mrunal Jhaveri), Thrive Ventures, Chirag Jain and several real estate-based family offices also participated in the round.
The latest round brings the startup’s valuation to around Rs 200 crore (around $25 million).
The presence of the Hosteller in the market
Founded in 2014, The Hosteller has become synonymous with affordable, quality accommodation and immersive travel experiences.
The startup claims to have a presence in over 60 locations, including major metropolises and scenic locations across Himachal Pradesh, Uttarakhand, Karnataka and more.
The Hosteller said its self-catering model ensures consistent quality and a standardised experience for backpackers, making it the preferred choice for budget-conscious travellers.
“We remain focused on delivering exceptional travel experiences to our backpacker community while fostering sustainable growth. With the launch of Glu, our end-to-end tech concierge service, and other initiatives, we are setting new benchmarks in the hospitality industry,” said Pranav Dangi, Founder and CEO of The Hosteller.
Expanding presence to over 150 locations
The Hosteller plans to use the capital raised to expand its footprint, with plans to expand to over 150 locations across India within 24 to 30 months.
“The Hosteller has solidified its position as a leader in the consumer and travel space through excellent execution. We are proud to support the company in its next phase of growth, with plans to expand to over 150 properties in the next two years,” said Arjun Vaidya, Co-Founder, V3 Ventures.
The startup aims to strengthen its presence in existing metropolitan cities while also venturing into new travel destinations, with a particular focus on providing immersive and high-quality travel experiences for backpackers.
CFO highlights financial benefits of investment
For the fiscal year ended March 2024, The Hosteller reported a total revenue of Rs 55 crore, with positive net margins.
The startup also said it is on track to grow significantly, with plans to add 50 more properties by the end of this year.
“This capital injection will accelerate our expansion plans while ensuring we maintain the high service standards our guests have come to expect. We have experienced significant demand, with a 4x growth in the number of locations over the past three years. We plan to continue this momentum by adding four to five new hostels to our portfolio every month,” said Saksham Khemka, Chief Financial Officer (CFO) of The Hosteller.
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