Series A funding round, raising Rs 32 crore (approximately $4 million). The round was led by V Cube Ventures, with participation from Lets Venture Angel Fund, AngelList, and several other investors.
The Hosteller’s board has approved the issuance of 10 equity shares and 64,281 Series A compulsory convertible preference shares, priced at Rs 4,977.5 each. This move is designed to bolster the company’s financial base and fuel its growth trajectory.
V Cube Ventures emerged as the lead investor, contributing Rs 22 crore to the round. Other significant contributors include Lets Venture Angel Fund, AngelList, and Merlin Marketing, which invested Rs 2.5 crore, Rs 50 lakh, and Rs 1.5 crore, respectively. An additional 14 angel investors also participated in the round.
The capital infusion will be utilized for expanding The Hosteller’s network of properties, enhancing marketing efforts, and addressing various general business needs. This funding comes after a three-year hiatus since the company’s previous $1 million seed round in 2021.
With the new investment, V Cube Ventures will acquire a 15% stake in The Hosteller, while Lets Venture Angel Fund will hold 3.45%. Founder and CEO Pranav Dangi and his family will maintain substantial ownership of 35.28% of the company.
Founded in 2014, The Hosteller operates a network of more than 50 hostels across India, offering affordable and high-quality lodging for backpackers. The company reported revenue exceeding Rs 55 crore for the fiscal year ending March 2024, with a net profit of Rs 4 crore. The Hosteller is also planning to add 75 new properties within the year to further extend its footprint.
As it moves forward, The Hosteller will continue to compete with industry players such as goSTOPS, Wudstay, and Backpackers Panda, aiming to strengthen its market presence and drive growth.
