This 4-month-old startup for budget travelers just acquired its 2-year-old rival

Almost everyone loves to travel – even on a tight budget. Often, accomodation is the biggest killjoy for such travelers. Like many other startups across the globe, India’s Wudstay is tackling this problem. It picks budget accommodation providers such as guesthouses and small hotels, improves their service, and connects them to travelers. But what makes Wudstay stand out is its superfast trajectory.

• The company was founded in April this year.

• It launched operations in June with budget stays in Gurgaon and Jaipur.

• Its first round of funding was announced in July – US$3 million from Mangrove Capital Partners and Nimbuzz CEO Vikas Saxena.

• It expanded to Manali, Delhi, Corbett, and Haridwar after the funding.

• Today, it revealed the acquisition of two-year-old Awesome Stays for faster expansion into more Indian cities.

With this acquisition, WudStay enters into six new markets: Varanasi, Goa, Mumbai, Chandigarh, Dehradun, and Pune. Deepak Sharma, CEO of Awesome Stays, and his team join Wudstay.

“The acquisition of Awesome Stays has come at a time when Wudstay is aggressively looking at expanding. Deepak [Sharma] has been running Awesome Stays for two years and his experience will help us a lot,” says Prafulla Mathur, founder and CEO of Wudstay. His plan is to get Wudstay to 65 new cities in the next 18 months

Learning from hoteliers

Think budget accommodation, and Airbnb would be the first to strike you. This San Francisco-headquartered unicorn is the largest online marketplace to list holiday homes and rooms around the world.

The success of Airbnb spawned numerous copycats across the globe. But in India – a tourist magnet – the model hasn’t yet caught on. That’s because the majority of Indians with a room to spare aren’t comfortable having a stranger under their roof. “If I were to tell my mom to rent out the two vacant rooms of our house in Jaipur, she will be shocked. ‘How can you even think of something like that?’ That will be her question. Even Indian travelers are not are not very comfortable staying with strangers in India. This is how we are,” Mathur tells Tech in Asia.

Mathur was shuttling between Jaipur and Gurgaon, running a mobile application development startup called Queppelin, when he spotted the opportunity. He started talking to guesthouse owners in these two cities to see things from their perspective. One of them based in Jaipur gave him a key insight. “He owned a small hotel with about 25 rooms. On average, only seven or eight rooms were occupied at a time. He had to run the whole business with what he made from those rooms alone. So he was forced to keep the rents high.”

Once a traveler, always a traveler