French multinational hospitality company Accor SA is in talks to invest up to USD 50 million and pick up a significant minority stake in budget hotels brand Treebo Hotels, two sources told Mint.
The talks are at an advanced stage. The funding will be used to scale up the hotel chain’s network. Accor’s investment, if it goes through, will give the hotel chain right to acquire a majority stake in Treebo later, the source said.
Treebo was founded in March 2015 by Indian Institute of Technology Roorkee alumni Rahul Chaudhary, Sidharth Gupta and Kadam Jeet Jain. Chaudhary and Gupta have previously worked with fashion website Myntra, while Jain has been with travel portal MakeMyTrip.
Treebo has so far raised more than USD 55 million. In 2017, Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital led a USD 34 million investment in Treebo. It also saw participation from existing investors Bertelsmann India Investments, Matrix Partners, and SAIF Partners.
Last year, Treebo expanded its offerings by launching three sub-brands, Trip, Trend and Tryst, with different price points.
Softbank-backed OYO and FabHotels, backed by Accel Partners, Aarin Capital, Goldman Sachs and Qualcomm Ventures, are Treebo’s competitors. FabHotels has so far raised a total of USD 35 million. OYO raised USD 1 billion in September, valuing the company at around USD 5 billion.