Treebo Hotels on Friday announced that it has raised $6 million (Rs 45 crore) in a new round of investment from its existing investors. Matrix Partners India, SAIF Partners, Ward Ferry, and Bertelsmann India Investments participated in this round. The company clarified that the fundraising is subject to regulatory approvals, wherever applicable.
The team says this investment will help the company strengthen its defences against the COVID-19 pandemic, which has had a severe impact on the economy, especially the travel sector. The company said it would also use this money to continue building technology products.
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. The current fundraise will partly be used to fund this technology development also.
Sidharth Gupta, co-founder of Treebo said, "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 percent on a year-on-year basis."
"While COVID has delayed our breakeven timeline, we are confident about the longterm prospects of the business and once things get better, I am confident we will resume our march towards profitability. In the interim though, this investment from our existing investors will give us the much needed staying power. It shows the faith that our investors have in the business," Gupta said.
Treebo claims to have cut down its losses in the 12 months preceding the pandemic.
"While it’s true that the travel sector is severely impacted by COVID, we believe this impact is temporary. When people start traveling again, they will look to stay with trusted brands rather than looking for the cheapest alternative or taking a chance with a mom-and-pop hotel. This is where Treebo’s strength lies," said Mayank Khanduja, managing director at SAIF Partners.
"While the last few months have been difficult for many companies, it has forced everyone to focus on what truly matters. For Treebo that is providing world-class technology solutions to its hotel partners to enable them to compete in a post-COVID world," added Tarun Davda, managing director, Matrix India.
As of today, Treebo has a portfolio of over 600 hotels in over 100 cities.
(Edited by : Jomy)