France based hospitality giant Accor SA is pursuing investment talks to invest nearly $50 million in budget hotel brand Treebo, according to people familiar with the matter. Sources claim that the talks have reached deceive stage and may fructify into a funding round pretty soon. This funding round is most likely to be part of a much larger round that may see participation from new as well as existing investors, sources further claimed.
![Treebo Hotels](https://www.techpluto.com/wp-content/uploads/2017/08/Tree.jpg)
If this funding round does materialize, it will come as a major respite for Treebo. The company has been enduring a dry funding spell ever since it last raised $34 Mn in August 2017. Its failure to garner investor’s confidence has casted shadow over its ability to compete with cash rich and unicorn rival Oyo Rooms. There have also been media reports last year that Oyo may acquire Treebo to further consolidate its position in the budget hotel space. However, nothing concrete seems to have happened on this front and the acquisition talks have most probably collapsed
Treebo has raised $57 million till date through high profile investors like SAIF Partners and Matrix Partners India. These funds have helped the four year old firm to create a robust network of budget hotels across the country. Today it boosts nearly 500 properties across 90 cities including 10,500-11,000 rooms.
The funding from Accor is expected to further help the Bengaluru headquartered firm to further scale up its hotel chain network across India. Apart from funding, the company may also receive some strategic help from Accor to fend off competition from SoftBank backed Oyo Rooms. Being Europe’s biggest hotel group and with market capitalization of Euro 9.91 billion, Accor boosts rich experience and management tactics in the hospitality industry.
According to sources, the term sheet put forward by Accor also has the option of French hospitality giant acquiring Treebo within 36 months of date of transaction.