Treebo raises $6M to be a booking site for India’s budget hotels

Bangalore-based hotel startup Treebo has closed its first round of venture capital funding worth US$6 million and co-led by Matrix Partners India and SAIF Partners.

Treebo, formerly known as Zipotel, was founded in March 2015 by IIT alumni Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Jain. Both Gupta and Chaudhary were colleagues at McKinsey and Flipkart-Myntra. Treebo offers a chain of affordable and quality hotels to travellers. It partners with small, standalone hotels to improve their customer service quality and marketing efforts.

“Currently there are upwards of a million budget hotel rooms in India. But 95 percent of them are in the unorganized segment. Therefore, despite the availability of online booking options and third party reviews, the lack of quality assurance continues to be an unsolved problem for the traveller in this segment. This is the problem we are focused on solving,” says Gupta in a statement.

Treebo competes with other stay and accommodation services such as Oyo Rooms, StayZilla, Zen Rooms, and Zostel’s Zo Rooms. This space, of late, has been the center of attraction for a number of major investors. Oyo Rooms recently raised US$25 million from US-based Greenoaks Capital and existing investors Sequoia, DSG Consumer Partners, and LightSpeed Ventures.

Chennai-based StayZilla, meanwhile, offers all kinds of stay options including homestays, hotels, guest houses, jungle lodges, and even boat houses. It raised US$20 million in a series B round this year from Nexus Venture Partners and Matrix Partners.