In a market where startups are seeing a slowdown in private equity investment, Stayzilla has managed to raise over $13 million from their existing pool of investors, Matrix Partners and Nexus Ventures, in multiple tranches.
Stayzilla, the Chennai-based budget hotel and home-stay aggregator has received the funding in three split tranches of $8.8 million, $1.9 million and $2.4 million, spanning between November 2015 and March 2016. The difficult investment environment forced Satyzilla to raise another round of funding to aggressively compete with the crowned budget hotel aggregator Oyo Rooms and home rental services like -Airbnb. Internal funding is today’s world has become the fastest and easiest way to raise money and drive business in a fragmented funding environment.
Yogendra Vasupal, the founder of Stayzilla said that this was the painless round the company has ever raised. He also added that,
We had sufficient money in the bank and we were not very sure whether we wanted to raise more funds. But we saw the market turn really bad and decided to go ahead with the fund raise as it’s good to have money in the bank and have a runway of 18 months.
Vasupal also mentioned that the company is already profitable at the “night stay room level” and they’ve never operated at a negative gross margin and has never discounted. The additional round of funding will help the company pave an extended roadmap, because they are already making money and the burn rate is also not very high.
Inasra Technologies Pvt Ltd, the parent company of Stayzilla will use the newly acquired funds to grow its alternative stay and home-stay segments. But, it seems that the funds are also being used to bring in high-profile silicon valley personal. To strengthen their platform on the technological front, the company has hired former Twitter Director, Pankaj Gupta as Chief Product Officer and President of Technology.
The company previously had raised over $20 million by Matrix Partners and Nexus Ventures, in a Series B funding round an year ago. An initial sum of money was also pumped into the company, at an undisclosed amount. The VC’s seem to be confident of Stayzilla’s business model and thus are pumping more money into the venture.
In an exchange with VcCircle, Vasupal told them,
In September 2015, the home stays segment accounted for 6% of our business. It was 20% in December and 40% in March. We are adding 7,000 rooms on monthly basis in the home stays segment across India. The remaining 60% of our business comes from the hotel segment.
Stayzilla today boats to currently offer more than 30,000 home-stay places in over 4000 locations around the country. Stayzilla was founded by Yogendra Vasupal, Sachit Singhi and Rupal Yogendra. Stayzilla works on a simple principle, where any property owner could go to the website and list their property type and their requirements. It then allows users to discover your property and in-turn allows you to choose the homeowners on the basis of common interests, social and professional connections.
Stayzilla is in the competitive space of budget hotel and accommodation, and is up against the likes of Oyo Rooms, ZoRooms and Goibibo. Other travel agencies and aggregator like MakeMyTrip, Yatra, Via and others are constantly trying to expand beyond their existing travel business. They have even thought of separating their hotel business and position themselves as a budget hotel aggregator.
