Pune: The Hosteller, India's leading backpacker hostel chain, has raised $4 million (approximately INR 32 crore) in a Series A funding round.
The round was spearheaded by V3 Ventures, with additional participation from key investors, including LV Angel Fund, FAO Ventures, Synergy Capital Partners, Unit-e Consulting, Ice.VC (backed by Mrunal Jhaveri), Thrive Ventures, Chirag Jain, and various real estate-based family offices.
This funding round has elevated The Hosteller’s valuation to an estimated INR 200 crore ($25 million).
The newly acquired capital will be used to support The Hosteller’s rapid expansion plans, with the company aiming to grow its presence to over 150 locations across India within the next 24 to 30 months.
The company plans to reinforce its footprint in major metro areas and extend its reach into emerging travel destinations, with a focus on delivering immersive travel experiences tailored for backpackers.
Arjun Vaidya, Co-Founder of V3 Ventures, expressed confidence in the company’s continued success, stating, “The Hosteller has proven itself as a leader in the consumer and travel space, consistently delivering top-notch experiences. We are excited to support their growth as they scale to more than 150 locations over the next two years."
The Hosteller’s Founder and CEO, Pranav Dangi, emphasized the company's commitment to offering unparalleled experiences to its backpacker community while maintaining sustainable growth.
"Our focus is on creating exceptional travel experiences for our guests, and with initiatives like Glu, our full-service tech concierge, we are raising the bar in the hospitality industry," Dangi said.
The capital infusion comes at a pivotal moment for The Hosteller, which has seen a fourfold increase in its number of locations over the past three years.
Chief Financial Officer Saksham Khemka highlighted the impact of the funding, noting that it would accelerate the company’s expansion plans without compromising on quality. "We plan to add four to five new hostels every month, maintaining our high service standards," Khemka added.
Since its launch in 2014, The Hosteller has grown into a premier name in budget-friendly lodging, currently operating in 60 locations across India. The chain is present in 12 states, including popular travel destinations in Himachal Pradesh, Uttarakhand, and Karnataka.
The company’s self-operated model ensures consistency in service and quality, making it a top choice for backpackers seeking affordable and unique travel experiences.
With revenue of INR 55 crore for the fiscal year ending March 2024, The Hosteller reported strong financial health and positive net margins. The company aims to expand its property portfolio by 50 more locations by the end of this year, further cementing its position as the largest backpacker hostel chain in South Asia.
Apurva Patel of Synergy Capital Partners praised the company’s effective capital utilization and customer engagement strategies, adding, “The Hosteller team has demonstrated excellence in execution, a level rarely seen in both young and mature companies.”
