Delhi-based NightStay, a mobile-based marketplace for last-minute hotel bookings, has raised an undisclosed amount in a pre-Series A round led by IAN and LetsVenture, a person familiar with the development told VCCircle.
Other investors who participated in this round include Aroon Purie, the founder editor of India Today, and former Info Edge CFO Ambarish Raghuvanshi. Existing investor Shailesh Vickram Singh, executive director of SeedFund, also participated in this round.
“The funds raised will be primarily used to ramp up our tech platform and for geographical expansion. While there has been tremendous evolutions in technologies like AI in the finance sector, the travel industry has been largely untouched by it. This is where we are looking to create a significant differentiator element,” said Khan.
In August 2015, NightStay had raised $500,000 in a seed round from Vivek Bihani of Bedrock Venture Management Pvt. Ltd, Rajesh Sawhney, founder of GSF, and Shailesh Vikram Singh.
The company was founded by Khan and Deepak Negi in March 2015. It procures unsold inventory from hotel owners at a discount and offers the rooms under three categories – boutique, business class and luxury class hotels. It does not offer further concessions on the discounted price and claims to have acquired customers without burning cash.
“Hotel inventory is a perishable commodity and is of zero value past its expiry date. What we do is to try and create value out of it and monetise it, in the process giving good returns to the hotel as well,” said Khan. The company has more than 1,000 partner hotels on its platform and is adding more hotels every month.
An IIM-Calcutta alumni, Khan is the CEO of the venture. He had earlier served as vice president of the products vertical at Sanjeev Bhikchandani-owned Info Edge. Negi, an alumnus of Symbiosis Center for Management Studies, is the COO.
The company claims 38-42% month-on-month growth. According to Khan, the company will break even in the next two quarters.
NightStay is available on both android and iOS platforms, and operates across Delhi-NCR, Mumbai, Bangalore, Chennai, Hyderabad, Goa, Ahmedabad, Jaipur, Kochi, Pune, Agra and Chandigarh. It is looking to expand to 10-15 more Indian cities, before launching its overseas operations. “We are constantly studying cities where there is scope for last-minute travel and will expand to one city at a time,” said Khan.
The hotel accommodation space has seen well-funded players shutting shop in recent times. In February, Stayzilla, which had raised $30 million from Nexus Venture Partners and Matrix Partners had said that it was halting operations to work on a B2B pivot.
In March, VCCircle had reported that RoomsTonite, which had raised $1.5 million, had shut shop following a failed fundraising bid.
A few players in this space, includes Mumbai-based Instant Hotels Around You Pvt Ltd, which operates HotelsAroundYou, and Bangalore-based SavvyMob Travel Solutions Pvt Ltd’s service, which operates SavvyMob, are still attracting investor interest.
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