India’s online budget hotel chain FabHotels has raised $7.8 million (approx Rs 54 crore) from Goldman Sachs, Accel Partners and Qualcomm in Series B1 round of funding. The fresh funding from existing investors is expected to help the firm compete with SoftBank-backed hotel chain OYO which is rapidly capturing the India hospitality market.
FabHotels has issued a total of 2,23,462 cumulative convertible preference shares to these investors, according to the report by yourstory.com. The hospitality chain has raised a total of $35.3 million in funding over 4 rounds.
FabHotels was founded in July 2014 by Vaibhav Aggarwal with just four properties. Later, Adarsh Manpuria joined the company as another co-founder.
Aggarwal said that he is betting big on technology to provide the right experience to the consumers, with the help of an in-house research and development team.
He further said that the firm also deploys an in-house pricing system which analyses data points every day to optimise price point for every room. This is done based on factors such as location, check-in date and seasonality of the property.
FabHotels gets involved with the operations of properties it manages, deploying its own staff including the property manager.
The company had earlier said that it has over 10,000 rooms in its kitty spread across 40 cities with an occupancy rate of 75-80 per cent.
Presently, FabHotels competes against the likes of OYO and budget hotel chain Treebo. The budget hotel chain works on an asset-light model, partnering with small hotels under a franchise model to provide hospitality services.
Whereas, the Indian hotel market is projected to grow to around $13 billion by 2020 from $7 billion in 2015, according to data platform Statista.