Bangalore-based hotel rooms aggregator Treebo is set to receive a fresh round of capital from the international hospitality chain Accor. The size of this investment is $40 million, and it gives option to Accor to takeover Treebo after three years on a right to decline basis, reports Economic Times.
This investment will take the overall amount raised by Treebo to $97 million and post this, the valuation of the company could go up to $205 to $210 million. There may be more investment rounds following this, it is learnt.
This development on fund raising by Treebo comes a few months after the company created different SBUs within its offerings of hotel rooms. Designated Tryst, Trend and Trip, the tariffs of the rooms in each of these sub-brands will range from Rs 2,500 to Rs 4000, Rs 1,500 to Rs 2,500 and the Rs 1,000 to Rs1,500 respectively. Treebo operates on a franchise model and the startup wants to position a majority of the rooms in the middle Trend segment where the rents will vary between Rs 1,500 and Rs 2,500. In terms of changing names, the top Tryst brand was called Select previously. The company has more than 10,000 rooms from 500 properties across the country under its management.
Major competition in the hospitality business for Treebo comes from OYO, a unicorn in the hospitality space. OYO is largely funded by SoftBank of Japan. The Indian startup has established and expanded in the Chinese market and in other countries as well. The startup has raised around $1 billion in funding. Treebo may have a lot of catching up to do.
Coming back to the investment by Treebo by Accor, the European hotel chain ranks high among the hospitality companies in the world with a market capitalization close to $10 billion. AccorHotels, Sofitel and Mercure are the brands in which Accor operates its properties across the world.