Budget hotel chain startup FabHotels has raised INR 11 Cr from existing investor Accel India. Almost a month back the company had reportedly raised same amount of capital from RB investment. These fresh funding have come at a time when budget hotels are seeking to resurrect their business in the post-lockdown phase.
According to regulatory filings, FabHotels has issued 4,553 convertible preference shares to Accel India for its contribution of 11 Cr. This latest fund infusion is a part of the ongoing series B round, with the company labeling this round as B3.
Accel’s latest capital infusion in FabHotels has come at a time when Treebo has raised substantial funding in recent months. Barely a few weeks back, Treebo had raised $6 Mn from its clutch of existing investors.
For FabHotels and Treebo, these recent funding rounds will be treated as nothing short of a lifeline. The entire hospitality industry was amongst the worst hit sectors during the national lockdown that had almost paralyzed the entire economy.
While the hospitality industry was amongst the worst hit, budget hotels like Treebo and FabHotels become even more vulnerable due to their supposedly limited cash reserves. Even the business of deep-pocketed Oyo Rooms had suffered immensely due to the nationwide lockdown.
FabHotels increases its ESOP Pool
In another important development, FabHotels has passed a resolution to increase its ESOP pool in order to retain the best talent and skilled employees.
According to regulatory filings, the company recently agreed to amend its ESOP 2017 scheme by increasing its options from 31,922 to 50,054 shares.
By the way, during the pandemic ESOP became the toast of the startup industry as it sought to retain the best talent while the economy was tanking down.