Chain of backpacker hostels The Hosteller raised Rs 32 Cr Series A funding

Chain of backpacker hostels The Hosteller has raised Rs 32 crore (approximately $4 million) in its Series A round led by V Cube Ventures with the participation of Lets Venture Angel Fund, Angelist, and several other investors.

According to company internal documents obtained by Entrackr from RoC, the board of The Hosteller has approved a special resolution to issue 10 equity and 64,281 compulsory convertible preference shares at an issue price of Rs 4977.5 apiece in order to raise Rs 32 crore, or $4 million.

With a 22-crore investment, V Cube Ventures led the funding round. Other participants included LV Angel Fund, AngelList, and Merlin Marketing, with contributions of Rs 2.5 crore, Rs 50 lakh, and Rs 1.5 crore, respectively. Fourteen more angel investors added the remaining sum.

The company plans to use these funds for marketing, hostel expansion, and other general purposes, according to the filings.

The Mumbai-based company closed its $1 million seed round in 2021, so it has been three years since then before receiving this funding. The company is reportedly valued at approximately Rs 182 crore, or $22 million, after allocation, according to the media.

After the new funding, Lets Ventures, which commands 3.45% of the company, will hold a substantial 15% of V Cube Ventures. Pranav Dangi, the company’s founder and CEO, and his family own 35.28 percent of the business.

The Hosteller is a chain of backpacker hostels that was founded in 2014 and provides high-quality, reasonably priced, and immersive lodging. Over 50 hostels are currently operated by the company throughout India.

According to reports, the company exceeded Rs 55 crore in revenue during its most recent fiscal year, which ended in March 2024, and made Rs 4 crore in net profit during that same time. This year, it also intends to add 75 new properties.

Among its rivals are Wudstay, Backpackers Panda, and goSTOPS.