Chennai-based Stayzilla, previously known as, has raised Rs 2.5 crores ($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). The company intends to used the amount raised to expand its network of properties and upgrade its technology platform.

Stayzilla 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.

The company claims to currently have a network of 4000 hotels across 600 towns in India, of which 350 towns are exclusive to Stayzilla and offer rooms at prices ranging from Rs 250 to Rs 60,000. In November 2011, the company had reported an operational profit of Rs 1.68 crore in sales.

Competitors:  Last year, we witnessed consolidation in the segment with leading OTAs MakeMytrip and Yatra acquiring hotel aggregation companies like and MagicRooms respectively, which were focusing on budget accommodation. Online travel agency Travelocity had also acquired Indian online hotel aggregator TravelGuru in August 2009. Cleartrip and iXiGo also offer hotel bookings on their portal. Tripadvisor integrates its hotel reviews with hotel bookings via tie-ups with other OTAs.