Backpacker Hostel Chain The Hosteller raises $4M in Series A round

The Hosteller, India's leading backpacker hostel chain, has successfully raised $4 million (approximately INR 32 crore) in its Series A funding round. 

This round was led by V3 Ventures, along with participation from existing investors including LV Angel Fund, FAO Ventures, Synergy Capital Partners, Unit-e Consulting, Ice.VC (backed by Mrunal Jhaveri), Thrive Ventures, Chirag Jain and several real estate-based family offices. 

The Hosteller Valuation

The new investment elevates The Hosteller’s valuation to approximately INR 200 crore (around $25 million).

The funds will be strategically utilised to expand The Hosteller’s footprint, with plans to expand to over 150 locations across India within the next 24 to 30 months. 

The startup aims to strengthen its hold in existing metro cities while also venturing into new travel destinations, with a particular focus on providing high-quality, immersive travel experiences for backpackers.

V3 Ventures, Co-Founder, Arjun Vaidya expressed his confidence in The Hosteller's growth trajectory, stating, “The Hosteller has firmly established its position as a leader in the consumer and travel space through its outstanding execution. We are proud to support the company as it enters its next phase of growth, with plans to expand to more than 150 locations within the next two years.”

“Our focus remains on delivering exceptional travel experiences to our backpacker community while fostering sustainable growth. With the launch of Glu, our complete tech concierge, and other initiatives, we are setting new benchmarks in the hospitality sector,” says Pranav Dangi, Founder and CEO of The Hosteller.

Highlighting the financial benefits of the funding, Saksham Khemka, Chief Financial Officer (CFO) of The Hosteller, said, “This capital infusion will accelerate our expansion plans while ensuring we maintain the high service standards our guests expect. We’ve experienced significant demand, with 4x growth in the number of locations over the past three years. We plan to continue this momentum by adding four to five new hostels to our portfolio each month.”

Since its inception in 2014, The Hosteller has become synonymous with affordable, quality lodging and immersive travel experiences. Operating in 60 locations nationwide, including major metros and scenic spots in Himachal Pradesh, Uttarakhand, Karnataka, and more, it is the only chain with a presence in over 12 states in India. Its self-operated model ensures consistent quality and a standardised backpacker experience, making it a preferred choice for budget-conscious travellers.

“The Hosteller team has demonstrated excellence in on-ground execution, capital utilisation, and customer engagement, setting a standard that’s rarely seen in both young and established companies,” added Apurva Patel, Synergy Capital Partners.

The Hosteller FY24 Revenue

In FY24, The Hosteller reported a top-line revenue of INR 55 crore, with positive net margins, reflecting its robust financial health and operational efficiency. 

The company is on track to scale up significantly, with plans to add 50 more properties by the end of this year, further solidifying its position as the largest backpacker hostel chain in South Asia.