Tech-enabled hospitality startup FabHotels raises $25 million in its series B round of funding led by Goldman Sachs Investment Partners. The Budget hotel aggregator also saw participation from Accel Partners and an existing investor.
As per Mint report, the funds will help to accelerate the nationwide expansion of FabHotels.
“Such unbranded budget hotels, with over one million rooms of capacity, make up the largest and most fragmented hospitality segment in India,” said Vaibhav Aggarwal, co-founder and CEO FabHotels.
He added that the company has grown four times in a year, but it is still limited to fewer cities. “We have focused on key metros and cities which are regional business hubs. While there is no aversion to expanding to tourist cities, as a young company, we took the call on focusing on business hotel destinations. We do have a presence in Goa though. Our focus would be on not going beyond top 30 cities.”
Founded in 2014 by Vaibhav Aggarwal and Adarsh Manpuria, Gurugram-based FabHotels is a branded budget hotel aggregator. It is currently operates over 5,000 rooms across more than 225 franchise hotels in over 20 major cities across India, including Mumbai, the National Capital Region and Bengaluru .
SoftBank-backed OYO Rooms and Treebo Hotels which was in talks with Ward Ferry to raise about $30 million are the other competitors in this segment.
In July 2016, FabHotels raised $8 million in a series A round from Accel Partners, RB Investments, Mohandas Pai’s Aarin Capital and Qualcomm Ventures. Prior to this it had raised $5 million from Accel Partners and Kalaari Capital.
Indian tourism industry is projected to touch market size of $157 billion by 2024 – up from $80 billion in 2013. Branded budget hotel alone contribute a $20 billion share in it.
“There is enormous opportunity to innovate around the hospitality experience of today’s budget traveler in India,” said Prashanth Prakash, a partner at Accel Partners. “FabHotels management team has built a strong brand and business operation representing quality, transparency and reliability.”
Image credit: FabHotels