Backpacker hostel chain, The Hosteller, has secured Rs 32 crore (around $4 million) in its Series A funding round, led by V Cube Ventures. Other participants in this round included Lets Venture Angel Fund, AngelList, and several individual investors.
The board of The Hosteller approved the issuance of 10 equity and 64,281 Series A compulsory convertible preference shares at an issue price of Rs 4,977.5 each to raise the funds. V Cube Ventures led the investment with Rs 22 crore, while LV Angel Fund, AngelList, and Merlin Marketing invested Rs 2.5 crore, Rs 50 lakh, and Rs 1.5 crore, respectively. An additional 14 angel investors contributed the remaining amount.
The funds raised will be used to expand The Hosteller’s chain of hostels, boost marketing efforts, and address other general business needs. This funding round comes three years after the Mumbai-based company raised $1 million in its seed round in 2021. Following this recent investment, The Hosteller’s valuation stands at approximately Rs 182 crore ($22 million). V Cube Ventures now holds a 15% stake in the company, while Lets Venture has 3.45%. The company’s founder and CEO, Pranav Dangi, along with his family, retains a 35.28% stake.
Founded in 2014, The Hosteller specializes in providing affordable, quality lodging for backpackers, offering unique travel experiences. The company currently operates over 50 hostels across India. It reported a revenue of Rs 55 crore for the fiscal year ending March 2024, with a net profit of Rs 4 crore. The Hosteller plans to expand further by adding 75 new properties this year.
The Hosteller faces competition from other hostel chains such as goSTOPS, Wudstay, and Backpackers Panda.