Stayzilla, an online aggregator of budget hotels and homestays, has raised over $13 million in a Series C round of funding from existing investors Matrix Partners and Nexus Ventures, according to documents filed with the Registrar of Companies.
The funding round was split into three tranches of $8.8 million (Rs.58.5 crore), $1.9 million (Rs.13 crore) and $2.4 million (Rs.16.3 crore), between November 2015 and March 2016.
Slowdown in the investment sentiment in the start-up sector has led to more internal funding in the company which is run by Inasra Technologies Pvt. Ltd and competes with budget hotel accommodation service provider Oyo Rooms and online travel agencies (OTAs) including MakeMyTrip, Goibibo and Yatra as well as home rental provider Airbnb.
It is the fastest way to get funded and is an important driver of the business in a poor funding environment, said Avnish Bajaj, managing director of Matrix Partners in an email.
Stayzilla and Nexus did not respond to emails.
The company last raised close to $20 million from Nexus Venture Partners and Matrix Partners in February 2015. The current investment marks the cautious venture capital funding market where investors are picking their bets selectively.
Stayzilla was founded by Yogendra Vasupal, Sachit Singhi and Rupal Yogendra. The company which started off by offering travelers stay options in budget hotels, last year forayed into home stays, connecting travellers with homeowners with spare accommodation in their houses.
According to its website, it currently offers 30,000 stay options, including hotels, lodges, homestays and guest houses across 4,500 cities.
It allows property owners to list their properties through the website by filling in basic details such as type of the property and details of people staying there. It also lets homeowners choose a guest on the basis of common interests and social, educational and professional connections.
The company is utilizing the funds raised to improve product and technology and marketing initiatives for the alternate stay business, said Bajaj.
Travel and accommodation space has seen more action in the last one year. In his recent visit to India, Nathan Blecharczyk, co-founder and chief technology officer of Airbnb, said that by 2020, the Indian travel market is expected to become worth $40 billion, adding India has become one of Airbnb’s fastest growing markets in the world.
OTAs such as MakeMyTrip, Goibibo and Yatra last year launched their budget hotel business, putting them in direct competition with Oyo Rooms and Zo Rooms. OTAs then delisted these start-ups from their platforms, indicating their ambition to build a separate budget hotel business.
MakeMyTrip also said it will get into non-hotel alternatives such as dharamshalas, homestays and bed-and-breakfast establishments. Yatra launched alternate stays last year.
In January, MakeMyTrip also announced a $180 million fund-raising from China’s Ctrip.com International Ltd. It was followed up by South African media company Naspers Group’s announcement to invest $250 million in Ibibo Group, which owns and operates Goibibo in February.
This article was first published on Livemint.com