Hosteller Raises Rs 48 Crore in Funding Round Led by V3 Ventures

• ByStartupStory     |    November 7, 2024

Backpacker hostel brand The Hosteller has successfully raised Rs 48 crore in its Series A funding round, led by V3 Ventures. The equity round saw V3 Ventures contribute Rs 32 crore, with Blacksoil providing an additional Rs 16 crore in venture debt. Other prominent investors, including Synergy Capital Partners, Unit e-Consulting, Real Time Angel Fund, and high-profile individuals like Harsh Shah from the Naman Group Family Office, also participated in this funding round.

The capital raised will enable The Hosteller to significantly enhance its presence in popular travel destinations like Rishikesh and Manali, while expanding its footprint to new cities across India. The company’s vision is to increase its bed capacity from the current 2,500 beds to 10,000 beds by March 2026, tapping into the growing demand for affordable and accessible accommodation among Gen Z and millennial travelers, especially in the post-COVID era.

A New Era of Travel for Gen Z and Millennials

Founded in 2014 by Pranav Dangi, The Hosteller was established with the mission to provide affordable, high-quality backpacker hostels across India, catering primarily to young travelers. The rise of digital nomadism—the lifestyle trend where individuals work remotely while traveling—has proven beneficial for The Hosteller, enabling it to tap into a growing market of young professionals combining work and travel.

Speaking on the occasion, Pranav Dangi, Founder and CEO of The Hosteller, said, “We aim to have 10,000 beds by March 2026 from the existing 2,500 beds. Backpacker hostels have become the go-to choice for Gen Z and millennial travelers in the post-COVID era. The fresh capital will not only accelerate our expansion but also help us acquire customers from the newer territories.”

The backpacker hostel sector has witnessed significant growth in recent years as Gen Z travelers shift from taking one holiday a year to frequent getaways during long weekends. The Hosteller, which has grown rapidly to become one of India’s largest self-operated hostel chains, has emerged as a preferred choice for budget-conscious, tech-savvy travelers.

Digital Nomadism Drives Demand for Hostel Accommodation

The rise of digital nomadism has reshaped the hospitality landscape, with The Hosteller positioning itself as a key player in this trend. The company provides an affordable, tech-first, and standardised hostel experience that appeals to young professionals seeking to combine work and travel. The trend of traveling while working remotely has accelerated the demand for quality and budget-friendly accommodation options.

Arjun Vaidya, Co-founder of V3 Ventures, shared his excitement about The Hosteller’s potential, saying, “We noticed a change in the way Gen Z travels—from saving up for one holiday a year to traveling every long weekend. And, The Hosteller fulfills this exact need. With a standardised, tech-first, budget-friendly option, the brand offers something truly unique to its customers. This makes us even more excited about the growth ahead. The Hosteller has demonstrated outstanding execution capabilities in the consumer and travel space.”

Expansion and Future Plans

The Hosteller, which now has a presence in over 55 destinations across India, plans to leverage the capital to further strengthen its offerings and expand its reach across more cities. The funding will also allow the company to enhance its tech-driven approach to hostel management, ensuring a seamless experience for both travelers and hostel owners.

The company’s expansion strategy includes not only scaling its current operations but also innovating in areas such as service quality, technology integration, and customer engagement, ensuring that it stays ahead of the competition and continues to meet the needs of the evolving traveler market.

About The Hosteller

Founded in 2014 by Pranav Dangi, The Hosteller aims to provide accessible and affordable backpacker accommodations across India. The company has quickly become a leader in India’s self-operated hostel industry, offering a vibrant and comfortable environment for young, budget-conscious travelers. With its focus on affordability, community, and quality, The Hosteller continues to lead the way in reshaping the landscape of hostel accommodation in India.

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