Online budget hotel chain Treebo is looking forward to raise about $30 million. For this new round of funding, the hotel chain is in talks with Hong Kong-based hedge fund Ward Ferry, which is expected to invest $20 million in Treebo and will also pick a stake in the hotel chain, according to ET report.
Ward Ferry also holds stakes in listed Chinese budget hotel chain Huazhu Hotels Group and India’s largest online travel agent MakeMyTrip.
Besides, Treebo was also looking for a co-investor to make an additional investment of an additional amount of $10 million in the company and complete the $30 million round.
And, the company has identified a probable co-investor. It is in discussions with Fosun, an investor in travel marketplaces Ixigo and MakeMyTrip.
This will be the third round of funding in the company. It raised the first round of $6 million led by Matrix Partners India and SAIF Partners in July 2015. The second round accounted of $17 million from Bertelsmann India in July 2016.
Founded in 2015, Treebo works on a full inventory model. It selects hotel properties, prescribe quality standards, provides staff training and technology back-end for hotel operators. Currently, it has 6,000 rooms and over 250 properties on its platform across 50 major cities.
Accel-backed FabHotels and SoftBank-backed OYO Rooms are the two competitors in the segment. Now, OYO Rooms has also shifted its focus to a leasing model, on-boarding the entire property instead of part of the room inventory of a hotel.
The $20-billion branded budget hotel market in India is expected to drive the lion’s share of revenues even for online travel agencies (OTAs) which have typically stayed away from branded hotel aggregators. MakeMyTrip recently delisted Treebo properties from its website, citing competition, as it looks to create its own branded accommodation play.