Chennai-based Inasra Technologies Pvt Ltd, the company that owns and operates Stayzilla.com, a hotel booking site, has raised $15 million in its Series B round of funding led by venture capital firm Nexus Venture Partners, with participation from existing investor Matrix Partners India.
As part of the deal, Anup Gupta, managing director, Nexus Venture Partners, will join the board of the company.
The funds will be used for expanding into new cities, developing a stronger brand platform and increasing partner network.
“This investment will help us expand exponentially and tap newer destinations. We will also focus on inflecting the nascent alternative accommodations market in India which is several times larger than the hotel reservations industry,” said Yogendra Vasupal, founder and CEO, Stayzilla.com.
“The increasing penetration of internet and smartphones coupled with India’s dynamic demographics has created the need for a platform that aggregates the entire range of accommodations options in India. We are happy to partner with Vasupal and the Stayzilla team to capitalise on the potential of this model in the coming years,” added Gupta.
The company plans to expand its reach to 8,000 towns and 50,000 accommodations by 2015-end. Currently, it claims to be offering over 20,000 accommodation options across 4,000 towns in the country. Its revenues come from charging a transaction/commission fee from the accommodation providers.
Stayzilla was co-founded in 2005 by Vasupal and was earlier known as Inasra.com; it was rebranded as Stayzilla in 2010. Unlike popular OTAs like MakeMyTrip which offer both ticket booking and hotel reservation, Stayzilla focuses solely on room bookings. The company had raised an undisclosed amount in its Series A round of funding from Matrix in October 2013. Before that, it had raised $0.5 million in seed funding from Indian Angel Network (IAN) in 2012.
In the online hotel booking space, it faces competition from OTAs (which also offer hotel bookings) such as Nasdaq-listed MakeMyTrip and VC-backed Yatra.com, among others. This space recently has also seen the emergence of startups like Findmystay, a reverse bidding OTA that enables customers to book hotel rooms at the price of their choice.
Nexus Venture Partners has over $600 million under management and a portfolio of over 50 companies across technology, internet, media, consumer, and business services sectors. Its investments include companies like Snapdeal.com, Cloud.com, Gluster and PubMatic.
(Edited by Joby Puthuparampil Johnson)