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Exclusive: Treebo Raises Rs 10 Crores from Clutch of Investors in Ongoing Series D round

Budget hotel chain startup Treebo has raised Rs 10 crores from clutch of Investors as it looks to stem the storm that has hit the hotel industry in the aftermath of pandemic lockdown. The latest tranche of funding is part of the series D round that was kick-started in June, with the latest round being touted as D2 round. The Bengaluru based company had raised $3 Mn or 22.50 crores from existing investors Bretelsmann BV, Saif Partners and Matrix Partner in the series D1 round.

However, Treebo has taken major haircut in its market valuation during the ongoing series D round. The haircut in its market valuation is a reflection of company’s desperate attempt to survive amid the pandemic crises.

For the latest tranche in the D2 round, Treebo has collected Rs 10 crores collectively from 18 investors. According to the regulatory filings, the company has allotted preference shares to these 18 investors at a premium rate of Rs 1,19,489 per share and face value of Rs 100 each. Deepak Parayanken is the angel investor who has been allotted mix of equity and preference shares while the rest have been allotted preference shares.

Following the investment, Deepak Parayanken owns 1.43% stake while the rest of the investors individually own less than 1% stake in the company.

Notably, to facilitate capital infusion via D2 round Treebo’s management had increased its authorized share capital in July.

The company had earned revenue of nearly 67 crores in FY19, a spike of almost 64% as compared to FY 18 when its revenue stood at Rs 41 crores. However, its expenses have been climbing equally at a sporadic pace, with the company’s expenses in FY 19 standing at approximately 195 crores.

Treebo’s other noteworthy competitor Fab hotel has also recently raised Rs 10 crore from RB Investments, as per the regulatory filings.

The fresh fund fusion will surely offer some respite to Treebo and Fab Hotels to overcome the current crises. The pandemic crisis has left the entire hospitality industry completely reeling, since almost all hotels including luxury hotels were operating with almost zero occupancy rates during the lockdown period.

As a result, all budget hotel players including the deep-pocketed Oyo rooms had to opt for layoffs and other cost-cutting measures.

Although lockdown has been lifted to a great extent across India, industry experts claim that it will still take some time for the budget hotel industry to bring their occupancy rate at the pre-Covid level.


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