FabHotels, a technology-driven budget hotel franchise, announced today that it has raised $25 million in a Series B investment led by Goldman Sachs Investment Partners. Accel Partners, an existing investor, also participated in the round. The funds will further accelerate the nationwide expansion of FabHotels.
FabHotels’ franchise model focuses on partnering with 20 - 40 rooms capacity budget hotels. Such unbranded budget hotels, with over one million rooms of capacity, make up the largest and most fragmented hospitality segment in India today. The company uses its proprietary technology platform to deliver superior yields to franchisees and assists in property operations for the delivery of best-in-segment stay experiences to travelers. FabHotels also operates a professional training academy for hotel staff and on the ground quality control teams.
"We have built our technology framework and operations with three core objectives: delivering a superior return on investment to our franchise partners, providing consistent high-quality experiences for hotel guests and building a strong sustainable business for everyone involved,” said Vaibhav Aggarwal, co-founder and CEO, FabHotels. “This investment by Goldman Sachs Investment Partners will further strengthen our market leadership position, brand and expansion.”
FabHotels currently operates over 5,000 rooms across more than 225 franchise hotels in over 20 major cities across India, including Mumbai, the National Capital Region and Bengaluru.
"We see significant growth potential in the budget lodging market in India and believe it is ripe for disruption,” said Shweta Bhatia, head of Asia investments at the Venture Capital and Growth Equity team at Goldman Sachs Investment Partners. “With technology at its core, FabHotels has scaled significantly within a short duration of time. We expect them to continue to transform and enhance the Indian hospitality marketplace.”
"There is enormous opportunity to innovate around the hospitality experience of today’s budget traveler in India,” said Prashanth Prakash, a partner at Accel Partners. “FabHotels management team has built a strong brand and business operation representing quality, transparency and reliability.”
The Goldman Sachs Investment Partners Venture Capital and Growth Equity team partners with entrepreneurs around the world to build disruptive businesses. Since 2003, the team has invested more than $6 billion in private opportunities globally.