Published on : Tuesday, May 14, 2019
Accor SA is in talks to invest up to $50 million in budget hotels brand Treebo Hotels. Treebo was founded in March 2015 by Indian Institute of Technology-Roorkee alumni Rahul Chaudhary, Sidharth Gupta, and Kadam Jeet Jain. Chaudhary and Gupta had previously worked with fashion website Myntra, while Jain had worked with travel portal MakeMyTrip.
Accor has put a term sheet for an investment of up to $50 million to pick up a significant minority stake in Treebo. The talks between the two parties are at an advanced stage. The Accor investment, if it goes through, will also give the hotel chain the right to acquire a majority stake in Treebo at a later date, he said.
Accor SA operates across various price categories with brands such as Sofitel, Ibis, Raffles, Novotel, and Mercure. Treebo last raised capital in 2017, when Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital led a $34 million investment, which also saw participation from its existing investors Bertelsmann India Investments, Matrix Partners, and SAIF Partners. Treebo has so far raised more than $55 million.
Last year Treebo expanded its suite of offerings by launching three sub-brands, Trip, Trend and Tryst, with different price points to attract various kinds of budget travellers. The Trip sub-brand offers the lowest prices, while the Tryst sub-brand is the top of the range offering from Treebo.
Treebo competes with Softbank backed OYO and FabHotels, which is backed by Accel Partners, Aarin Capital, Goldman Sachs and Qualcomm Ventures. FabHotels has so far raised a total of $35 million.