Chennai-based Insara Technologies, which operates hotel booking site Stayzilla, has raised $20 million in a Series B round of funding led by Nexus Ventures and with participation from existing investor Matrix Partners India.
The funds will be used for expanding into new cities, developing a stronger brand platform, as well as for increasing the partner network and as part of the deal, Anup Gupta, managing director, Nexus Venture Partners, will join the board of the company.
Founded in 2005, Stayzilla, operated by Inasra Technologies Private Limited, is a hotel booking portal which allows users to search and book hotels across Indian cities with a specific focus on tier 2 and tier 3 cities in the country. The site also offers options to filter results based on budget, amenities, ratings, cuisine and other variables. In 2013, Stayzilla had raised an undisclosed amount of funding from Matrix Partners, in return of a minority stake in the company.In 2012, the company had raised $500,000 from Ravi Krishnappa, one of the founding partners of the angel fund VertExperts, who led the investment as part of the Indian Angel Network (IAN).
Stayzilla faces competition from more established online travel agents such as MakeMyTrip, Cleartrip and Yatra whose hotel booking services has been growing at an impressive rate. At MakeMyTrip, hotels and packaging business contributed for 44.2% of MakeMyTrip’s net revenues for the quarter ended December, and the segment’s revenues grew by 43.5% to $15.8 million for the quarter, from $10.99 million in the same quarter last year. Meanwhile at Cleartrip, reported a 98% rise in hotel bookings in the third quarter. Cleartrip, which is unlisted company, did not give the increase in searches and bookings in terms of absolute terms, but said that it saw an average of 2,500 room-nights booked per day. Over a 90 day period that translates to about 2,25,000 hotel bookings.
Correction: An earlier version of the story said that Stayzilla raised $15 million citing a report by Techcircle. However, a press release pointed out the correction. Error is regretted and the correction reflects the same.