Budget hotel brand Treebo has raised $6 million in a new round from existing backers Matrix Partners India, SAIF Partners, Ward Ferry and Bertelsmann India Investments. The firm will invest the fresh capital in sprucing up technology and strengthening defences against the pandemic.
The fresh infusion from existing backers demonstrates their faith in the company’s future potential in extraordinary times like now. The proceeds will be crucial for Treebo as the hospitality sector has been among the worst by the pandemic.
“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 Rs 10 lakh – an improvement of 95% on a year-on-year basis,” said Sidharth Gupta, co-founder of Treebo in a statement.
Treebo also said that it will resume its march towards profitability after improvement in the business condition. “In the interim though, this investment from our existing investors will give us the much needed staying power…,” added Gupta.
In June, Entrackr had reported that Treebo is kicking off its Series D round with investment from the aforementioned investors along with participation from HNIs including Vijay Shekhar Sharma, Prasoon Agarwal, and Saikiran K.
Besides the severe impact on business and operations, the ongoing pandemic has also impacted fundraising for the hospitality sector. Except Oyo that has a deep pocket, others in this space are finding it hard to deal with the disruption.
To extend the runway and cut costs, Treebo had relieved 100-120 employees under its ‘Paid Voluntary Resignation Scheme’. Its co-founders also opted for a significant pay cut.
With over 600 hotels under its portfolio, Treebo has a presence in more than 100 cities. Last year, the company had also launched a SaaS business under the brand name ‘Hotel Superhero’, to monetise its technology by selling it to other independent hotels and hotel chains.