Budget Hotels Chain FabHotels has recently raised an amount of $25 Mn in a Series B funding round led by Goldman Sachs, an American multinational finance company, that backed the likes of Uber and Spotify.
Started in 2014 by Vaibhav Aggarwal and Adarsh Manpuria, FabHotels is a branded budget hotel aggregator wherein it partners with smaller hotels for providing standardized services to budget travelers.
Unlike the OYO, FabHotels gets into franchisee pacts with hotels and only gets involved in the operations of the hotel but also gets the exclusive distribution rights for the entire inventory. This gives them better control on customer satisfaction and revenue per available room.
“The focus in past 12 months has been on investing in technology. In the next 12 months, we want to triple our technology team and double the number of rooms from the 5,000 that we have today,” said Vaibhav Aggarwal, co-founder and chief executive officer, FabHotels.
FabHotels has more than 225 franchise hotels in over 20 cities, including Mumbai, the National Capital Region (NCR) and Bengaluru, Aggarwal said. The firm typically partners with budget hotels having 20-40 rooms.
“Such unbranded budget hotels, with over one million rooms of capacity, make up the largest and most fragmented hospitality segment in India today,” said Aggarwal.
The latest funds will be utilized to expand the tech team, marketing the brand and sprucing its supply further, Aggarwal added.