The funding round was led by Treebo’s existing investors Matrix Partners India, SAIF Partners, Ward Ferry and Bertelsmann India.
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Bengaluru-based budget hospitality chain Treebo Group of Hotels has raised USD 6 million in a funding round led by its existing investors Matrix Partners India, SAIF Partners, Ward Ferry and Bertelsmann India.
“The investment will assist the establishment toughen up its defenses against the COVID-19 pandemic, which has had a brutal blow on the financial system, particularly the travel sector,” the company said in a statement.
Treebo operates over 600 hotels in more than 100 cities across the country, competing with the likes of Oyo Hotels & Homes, FabHotels, Yatra, MakeMyTrip and ClearTrip.
The company will use the proceeds to further ramp up its technology product suite, with a focus on its SaaS (software as a service) business, Hotel Superhero, a platform which will empower small and medium sized hotels owners with cutting-edge tools and competency across all aspects of hotel operations, the statement added.
“Small and medium enterprises (SMEs) represent the growth engine of the country, and in fact the world. Superhero is designed to serve such SMEs in the hospitality sector. Technology solutions are a necessary but not a sufficient offering for such clients. In order to serve their needs effectively, you need an offering that goes beyond SaaS. It has to be a combination of SaaS, BPO (business process outsourcing) and advisory, which is exactly what Superhero is,” said Sidharth Gupta, co-founder, Treebo Hotels.
While it’s true that the travel sector is severely impacted by COVID, we believe this impact is temporary – Mayank Kanduja, managing director, SAIF Partners.
Its most recent round of financial aid comes more than three years after Treebo raised USD 34 million in its Series C funding round from Hong Kong-based hedge funds Karst Peak Capital and Ward Ferry Management. In June this year, the company was reported to have kickstarted its series D funding round from its existing investors.
“Before the pandemic unfolded, Treebo had a strong growth trajectory and we were well on our way to hit EBITDA profitability within this calendar year. Our EBITDA loss in February, for example, was under INR 10 lakh-an improvement of 95 per cent on a year-on-year basis. While COVID has delayed our breakeven timeline, we are confident about the long-term prospects of the business and once things get better, I am confident we will resume our march towards profitability,” Gupta added.
Commenting on the timing of the investment as the travel industry continues to reel under the impact of Covid-19 pandemic, Mayank Khanduja, managing director, SAIF Partners said “While it’s true that the travel sector is severely impacted by COVID, we believe this impact is temporary. When people start traveling again, they will look to stay with trusted brands rather than looking for the cheapest alternative or taking a chance with a mom-and-pop hotel. This is where Treebo’s strength lies. They have built a loved brand, which will likely see a spike in customer uptake and revenue once the pandemic recedes,” stated.