Stayzilla Parent Co weighs second round of fundraising
Inasra Technologies, which owns hotel booking website Stayzilla.com, is looking to raise its second round of institutional funding, estimated at between Rs 92-152 crore.
If successful, the round will follow the yet undisclosed funding raised by the Chennai-based company from venture capital firm Matrix Partners India in October last year. It had also raised seed funding of $500,000 from the Indian Angel Network in March 2012. Sources indicated that Stayzilla could dilute 15-20% stake in this round of financing.
Unlike other online travel ventures such as Nasdaq-listed MakeMyTrip.com and Yatra.com, Stayzilla focuses on room bookings, majority of which come from tier-II and tier-III cities. It competes with ventures such as MyGuestHouse, in which MakeMyTrip has a substantial stake, and IndiaHotelReview.
Stayzilla confirmed that it was in talks with investors to fuel its further expansion.
“We don't have an urgency to raise funds. The only thing that is driving interest in raising capital is that by December, we could be doing 3,000-5,000 room nights a day in a market, where we can target 50,000 nights in two years,“ said founder and CEO Yogendra Vasupal. Other co-founders of the venture include Rupal Surana and Sachit Sanghi.
Stayzilla claims to have a network of over 16,000 hotels, spread across almost 1,100 towns and cities in India.
The company is believed to record about 1,800 bookings per day now, compared with 350 a day in September last year. Its gross bookings are also growing at 50% on a month-on-month basis, with a run rate of Rs 60 crore and Rs 70 crore.
Rising internet penetration, driven by increasing smartphone user base, is moving all aspects of travel business online. While travel ticketing business has moved online across segments, industry estimates suggest that less than 2% of the accommodation in the value and budget segment is booked online.
This is luring investors back into India’s online travel ventures, which were responsible for kicking off the country’s e-commerce boom, after a few lacklustre years due to sluggish macroeconomic conditions and headwinds faced by the country’s airline industry.
The last 12 months have seen a slew of transactions among large travel portals as well as smaller niche players.
Yatra.com raised Rs 140 crore from IDG Ventures India and Vertex in April, Nasdaq-listed MakeMyTrip mopped up Rs 450 crore in primary capital through a follow-on offering in March.
More recently, travel holiday portals like WeAreHolidays and Travel Triangle have also attracted venture capital funding from Matrix and SAIF Partners, respectively.