Ward Ferry may check into Treebo with $20 million

BENGALURU: Hong Kong-based hedge fund Ward Ferry is in talks to pick up a stake in online budget hotel chain Treebo for its ongoing third round of funding where it may raise about $30 million or Rs 192 crore, according to two sources familiar with the development.

Ward Ferry also holds stakes in listed Chinese budget hotel chain Huazhu Hotels Group and India's largest online travel agent MakeMyTrip.

Sources aware of the talks said it was in advanced stages with Ward Ferry looking to invest $20 million into the company. Treebo is also said to be looking for a coinvestor who could participate in the round with an additional amount of $10 million.

For this, the company has been in discussions with Fosun which is an investor in travel marketplaces Ixigo and MakeMyTrip.
Treebo cofounder Sidharth Gupta said he did not want to comment on the ongoing investment. The company had previously raised $17 million, led by Bertelssman India Investments, in July 2016. Matrix Partners India and SAIF Partners are early investors in the company.

Both Ward Ferry and Fosun executives did not respond to emailed queries from ET till the time of going to print.

Treebo works on a full inventory model selecting hotel properties, prescribing quality standards and providing staff training and technology back-end for hotel operators. The company, founded in 2015, currently has 6,000 rooms and over 250 properties on its platform across 50 major cities.

It competes with Accel-backed FabHotels and SoftBank-backed OYO Rooms which has also shifted focus to a leasing model, on-boarding the entire property instead of part of the room inventory of a hotel.

The $20-billion branded budget hotel market in India is expected to drive the lion's share of revenues even for online travel agencies (OTAs) which have typically stayed away from branded hotel aggregators. MakeMyTrip recently delisted Treebo properties from its website, citing competition, as it looks to create its own branded accommodation play.