Branded hostel chain The Hosteller has secured ₹150 crore in a Series B funding round led by PROMAFT Partners and V3 Ventures, while ITI Growth Opportunities Fund, Merisis Wealth Trust, and several prominent family offices also participated. Notably, the company stated that this marks the largest institutional funding round ever raised by a backpacker hostel company in India. Furthermore, The Hosteller plans to utilize the fresh capital to accelerate its expansion across key travel destinations in the country.
Founded in 2014, The Hosteller currently operates more than 75 properties across 13 states and has hosted over 20 lakh unique travellers. Moreover, over the past 12 months, the company has added more than 30 new properties and increased its traveller capacity by nearly 70%, reflecting strong growth momentum. Consequently, the company now aims to scale its network to 25,000 beds nationwide within the next 36 months. In addition, it is preparing to launch a ‘travel super app’ that will integrate accommodation, food and beverage (F&B), mobility, and curated travel experiences into a single digital platform.
Pranav Dangi, founder and CEO of The Hosteller, said he started The Hosteller because Indian travellers deserved better than a choice between overpriced hotels and unreliable budget stays. “Eleven years and 20 lakh travellers later, the model has proven itself. This round is about sustained acceleration to 25,000 beds, a full-stack travel platform, and building the kind of company that can define this category for decades. We are on a path to building a truly public, enduring hospitality brand out of India,” he added.
Meanwhile, investors expressed strong confidence in the company’s growth trajectory and business fundamentals. Soham Avlani, founding general partner, PROMAFT Partners, said that a generation valuing experience over star ratings is reshaping India’s travel market, and he believes The Hosteller is best positioned to lead this shift. “The unit economics of this business are exceptional. The occupancy, the repeat rates, and the revenue per bed all outperform what we see in budget hotel chains at comparable price points,” he added.
Importantly, this investment marks PROMAFT Partners’ second deployment from its debut $100 million Series A/B fund, following its earlier investment in Wiom. Additionally, Arjun Vaidya, co-founder, V3 Ventures, said the growth and performance metrics have been ‘exceptional.’ ” Continuing to back the company in this round was one of the easiest decisions we have made as a fund,” he added.
Further reinforcing investor confidence, Mohit Gulati, CIO, ITI Growth Opportunities Fund, said that India’s experiential travel segment remains in its early stages, and he added that Pranav has built the only brand in this space that travellers actively plan around. “The Hosteller is one of those rare businesses where the unit economics tell the story better than any pitch deck. Occupancy, repeat rates, revenue per bed—the numbers hold up property by property, across geographies and seasons,” he added.
As demand for affordable, experience-driven stays continues to rise, the company looks forward to scale its footprint, enhance digital capabilities, and redefine budget hospitality through innovation and strong unit economics.
