Even after having to shut down its hotel vertical earlier this year, Paytm has not given up on the segment. Reportedly, the Noida-based company has been acquiring the last-minute hotel booking platform, NightStay.
Apparently, the deal is a mix of cash and equity worth $20 million. However, the acquisition amount seems mind-boggling for the little known three years old company.
NightStay offers unsold hotel rooms to consumers with steep discounts in real time, across a dozen cities including Delhi (NCR), Bengaluru, Mumbai, Pune and Chandigarh amongst others.
So far, the company had raised funds in the range of $1.2 to 1.5 million (according to our sources) in two rounds.
A year ago, it secured an undisclosed amount in a Pre Series A round led by Indian Angel Network (IAN) and LetsVenture. Previously, NightStay had scored a $500K seed round from Vivek Bihani (Bedrock Venture), Rajesh Sawhney, and Shailesh Vikram Singh.
Earlier this year Paytm shut down its hotel vertical. Entrackr had exclusively reported about the company’s withdrawal of the hotel booking feature from its app. Nitin Misra, who was looking after the dissolved vertical at Paytm is now heading the Consumer Lending and Digital Gold divisions.
However, after acquiring NightStay, the Vijay Shekhar Sharma-led company is likely to resume the hotel booking feature. As of now, it’s not clear whether Paytm would follow the NighStay model or a generic hotel aggregation model for its second coming in the segment.
Besides movies, entertainment, flight and bus ticketing segment, Paytm was determined about the vertical until late last year. The SoftBank-backed company had abandoned the hotel vertical because of poor traction.
Since Paytm has entered the hotel booking business for the second time, it would be interesting to see how it chooses the right model and competes with the likes of MakeMyTrip, Yatra, Cleartrip, and others.
Over the years, the hotel vertical has been a major source of revenue for OTAs who have experienced margin erosion in air ticketing segment.
The development was first reported by TOI.