Bangalore: Treebo Hotels today announced that it has raised $6 Million (Rs 45 Cr) 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 investment will help the company strengthen its defences against the COVID19 pandemic, which has had a severe impact on the economy, especially the travel sector. The company said that it would also use this money to continue building cutting-edge technology products for its business. Treebo is one of the very few companies around the world in the travel space that have been able to attract investment despite the onslaught of COVID.
Commenting on the fundraise, 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% on a year-on-year basis. While COVID has delayed our breakeven timeline, we are confident about the long term 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.”
Treebo has been pursuing the strategy of building a sustainable business with strong fundamentals. It had cut down its losses drastically in the 12 months preceding the pandemic. This meant that the company was better prepared to cope with the financial pressure imposed by the pandemic compared to some of the other players. 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. The company clarified that the fundraise is subject to regulatory approvals, wherever applicable.
“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. They have built a loved brand, which will likely see a spike in customer uptake and revenue once the pandemic recedes”, said Mayank Khanduja, Managing Director at SAIF Partners, one of Treebo’s investors.
“As long term investors, we have always been amazed with the deep execution demonstrated by Treebo management before and during COVID times and have a strong view of the business in the future. We think COVID gives an opportunity to the company to continue innovating in tech and emerge as a leading and most loved brand in the hospitality space”, said Pankaj Makkar, Managing Director, Bertelsmann India Investments, one of Treebo’s investors that participated in the current investment round.
“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”, commented Tarun Davda, Managing Director, Matrix India.
Treebo has launched a program called Treebo Hygiene Shield to tighten its safety protocols in the face of COVID. All operational hotels of the company are regularly audited on their compliance of COVID related safety standards and are accordingly given a gold or platinum hygiene shield rating on the website. Treebo has a portfolio of 600+ hotels in 100+ cities.