Bengaluru-based hourly hotel booking company, MiStay, has raised an undisclosed amount of investment from ah! Ventures and other investors in a funding round, led by Hyderabad-based ex-entrepreneur Sumit Nagpal.
The company is said to utilise the fund to grow the leadership team and build up the brand.
In a statement, Sandeep Jaiswal, the co-founder and CEO of MiStay, stated that the hotel industry is poised to transform as travellers today no longer plan their trip based on the hotels’ check-in time. “This transition requires disrupting of age-old technological practices and raising operational capabilities of hotels. MiStay is building the entire ecosystem ground up and is said to enable the flexible hotel stay and be a leader in this market,” added Jaiswal.
Pranav Prabhakar, the cofounder and CTO of MiStay, also mentioned that the micro-stay model brings a unique revenue optimisation opportunity for hotels. MiStay is also expected to help hotels to realise their full potential by unlocking the value in hotel inventory during the hours, which otherwise remains unutilized.
MiStay claims that this will give hotels to run at more than 100% occupancy. The company is working closely with a lot of hotels and aims to bring in more flexibility to travellers, where they have optimized the packages by dividing a full-day into three slots of a few hours which costs as low as 30% of the full-day tariff.
Abhijeet Kumar, founding partner at ah! Ventures said that he is very excited to back their vision and is optimistic about MiStay’s unique approach towards hotel industry. He said “the market opportunity and the efficiency with which the founding team has scaled the business so far, made the investment decision a no brainer.”
The average hotel occupancy rate in India stands at around 65%, thus the unsold hotel rooms constitute around $6 Bn of missed revenue opportunity for hotels. MiStay is said to create new demand for customers who require hotels with early check-in, short-stay or day-use rooms which hotels can tap into to maximize their occupancy and revenue.
MiStay is currently operational in 100 cities with around 1,500 hotel partners. Unlike other counterparts who focus on couple-friendly hotels, MiStay sees business travellers having long layover as the primary target audience. The partner hotels of MiStay include many premium hotel brands such as The Park, Radisson, Holiday Inn as well as mid-scale hotel chains such as Lemon Tree, Mango Hotels, Mint Hotels, 1589 Hotels, Treebo, and others.
Founded in 2016 by alumni of IIT Madras, Sandeep Jaiswal and Pranav Prabhakar, MiStay had previously raised the first round of seed investment in late 2017. Later, the company pivoted from the initial focus on the B2B corporate market to the consumer market in mid-2018. Since then, MiStay claims to have grown 5 times and hit operational profitability in June this year.
Earlier this month, Gurugram-based hospitality decacorn OYO Hotels and Homes raised $1.5 Bn as part of its Series F funding round. The announcement comes at a time when media reports have resurfaced about dissatisfied hotel owners who are ending their ties with OYO.
The complaints against OYO and its “predatory” behaviour surfaced last year as well and since then, the trend hasn’t come to an end. In September, a Bengaluru hotelier Natarajan V R S, who alleged the OYO’s founder Ritesh Agarwal and two other company representatives of cheating and criminal breach of trust.