India’s premier backpacker hostel chain, The Hosteller, based in Pune, last week secured a significant investment of $4 million (approximately INR 32 crore) in its Series A funding round, fueling its growth and expansion plans.
The Hosteller’s Series A funding round was led by V3 Ventures, alongside notable contributions from esteemed investors, including LV Angel Fund, FAO Ventures, Synergy Capital Partners, Unit-e Consulting, Ice.VC (supported by Mrunal Jhaveri), Thrive Ventures, Chirag Jain, and prominent real estate-focused family offices. This successful funding round has propelled The Hosteller’s valuation to a remarkable INR 200 crore (approximately $25 million).
The Hosteller is poised for unprecedented growth, with the freshly secured capital set to fuel its ambitious expansion plans. The company has set its sights on a rapid scaling of operations, targeting over 150 locations across India within the next 24 to 30 months.
The Hosteller aims to solidify its position in key metropolitan markets while expanding into up-and-coming travel hotspots, with a dedication to crafting authentic, backpacker-focused experiences that foster meaningful connections and unforgettable adventures.
Voicing his optimism for Hosteller, Arjun Vaidya, Co-Founder of V3 Ventures, in a statement said, “The Hosteller has proven itself as a leader in the consumer and travel space, consistently delivering top-notch experiences. We are excited to support their growth as they scale to more than 150 locations over the next two years.”
Synergy Capital Partners’ Apurva Patel lauded The Hosteller’s strategic financial management and customer-centric initiatives, saying,
“The Hosteller team has demonstrated excellence in execution, a level rarely seen in both young and mature companies.” said Patel
Pranav Dangi, Founder and CEO of The Hosteller, underscored the company’s dedication to providing exceptional experiences for its backpacker community, while prioritizing environmentally responsible and sustainable expansion.
“Our focus is on creating exceptional travel experiences for our guests, and with initiatives like Glu, our full-service tech concierge, we are raising the bar in the hospitality industry,” Dangi explained.
The Hosteller has secured timely funding, coinciding with a period of rapid growth, marked by a fourfold expansion in locations over the past three years.
According to Chief Financial Officer Saksham Khemka, the investment will propel the company’s growth trajectory while preserving its commitment to quality. “We plan to add four to five new hostels every month, maintaining our high service standards,” Khemka added.
Launched in 2014, The Hosteller has rapidly expanded to become a prominent player in the budget hospitality sector, operating 60 locations across 12 Indian states. Its strategic presence in sought-after destinations such as Himachal Pradesh, Uttarakhand, and Karnataka has cemented its position as a preferred choice for travelers seeking affordable lodging.
By maintaining a self-operated model, The company ensures consistency in quality and service, appealing to backpackers seeking unique and budget-friendly travel experiences. The company’s financial health is evident in its INR 55 crore revenue for the fiscal year ending March 2024, with positive net margins.
Among its growth plans, The Hosteller aims to bolster its position as South Asia’s largest backpacker hostel chain by adding 50 new locations to its portfolio by the end of the year.
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