Previously, the company had raised $34 Mn in Series C
The company had asked its staff to voluntary resign in April due to lack of revenue
The business of both OYO and Treebo took a hit due to the pandemic
Update: October 9, 2020 | 5:23 PM
Treebo Hotel has annouced that it has raised an additional $3 Mn, taking the funding amount to $6 Mn. The company will use this funding to strengthen its defence against the Covid-19 pandemic.
Bengaluru-based budget hotel chain Treebo Hotels has raised INR 22.50 Cr (nearly $3 Mn) Series D funding from existing investors Bertelsmann SE & Co, Matrix Partners India and SAIF Partners India.
According to the ministry of corporate affairs filings accessed by Inc42, Treebo Hotel’s parent company Ruptub Solutions Private Limited has allocated 1,878 Series D1 Cumulative Convertible Preference Share (CCPS) at a nominal amount of INR 100 per security at a premium of INR 1,19,752.99 to three allottees leading up to INR 22,50,83,915. Bertelsmann Nederland BV, Matrix Partners India and SAIF Partners India have picked up 626 stake each for INR 7.50 Cr.
Prior to this, the company had raised INR 220 Cr ($34 Mn) in Series C funding round from Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital. SAIF Partners, Matrix Partners India and Bertelsmann India Investments had also participated in the round.
The company was founded in 2015 by Sidharth Gupta, Kadam Jeet Jain and Rahul Chaudhary. As per the last available metrics, Treebo had over 500 hotels and over 10K rooms across more than 95 cities. The company is a close competitor to Ritesh Agarwal-led OYO Rooms that has managed to spread its presence across 80 countries and 800 cities. OYO Rooms has signed up 35K hotels and 125K vacation homes, with over 1.2 Mn rooms.
Despite the size of these companies, the hotel and hospitality industry has been hit severely due to the Covid-19 pandemic and the resultant travel restrictions. Inc42 had previously reported that Treebo launched Paid Voluntary Resignation Scheme (PVRS), under which employees can resign, get the notice period waived off and get one month pay. The scheme would allow employees to get their due salary, and a group of senior leaders will help employees land new jobs.
The founding team explained that the vast majority of its businesses are on stop-sell, all demand channels have dried up, revenue has nearly disappeared and cash reserves are running low. The voluntary resignation move may impact 396 of over 500 employees of Treebo.
Meanwhile, Treebo’s rival OYO had to resort to furloughs, 25% salary deductions and layoffs across all 80 countries it was operating in. OYO’s founder Agarwal had come on record to confirm OYO’s occupancy rate and revenues have dropped by more than 50 to 60% and the company’s balance sheet has come under severe stress.
Recently, the company had decided to offer a deeply discounted employee stock ownership plan (ESOP), which will make each and every employee a shareholder in the company.
