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FabHotels raises $8 million in funding

Hotel

FabHotels, a Gurgaon-based budget hotel aggregator has raised $8 million (Rs 54 crore) from Accel Partners, RB Investments Mohandas Pai’s Aarin Capital and Qualcomm Ventures in a Series A round, reports Mint. The company will use the funds for brand building and to expand its network.

The platform, earlier known as Casa2Inns, had raised $5 million in a round of funding from Accel Partners and Kalaari Capital in May 2015. It had stated that the funds will be used to expand its services in India as well as to improve its technology. It currently operates in more than 15 cities and claims to have about 65 hotels in its portfolio, with plans to add 35 more hotels by September.

How does it work?

FabHotels claims to offer a better experience than other hotel aggregators by entering into franchisee agreements with hotel owners. It charges a franchisee fee of around 20% of the monthly revenue, Mint said in its report. Rooms booked through FabHotels cost about Rs 1,800 to 2,000 per night on an average. The company claims to be earning revenues worth $1 million a month and has an occupancy rate of 83%.

Related developments in budget hotels segment:

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– In February 2016, Rakesh Rana, the former head of hotel stays at Cleartrip, had launched a budget accommodation company called Comfy Stays which offers guest houses and aggregates service apartments.

– Online travel aggregator MakeMyTrip (MMT) had launched Value+, a brand of budget hotel rooms, with rooms starting at Rs 1,000 per night in November 2015.

– In September 2015, online travel site Goibibo had launched a new section on its website and mobile app called GoStays which aggregates unbranded budget accommodations across India.

– WudStay had acquired Awesome Stays, a two year old offline budget hotel aggregator for an undisclosed amount, in August 2015 for expanding to new cities.

– Treebo had raised $6 million from Matrix Partners India and SAIF Partners in June and had stated that it would be using the funds expand nationwide.

Image Credits: Flickr user Brent Moore under CC BY 2.0

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