 "Stay in every zilla")
During his third year in college, Yogendra Vasupal earned about Rs 1 lakh through his freelance work. He had a passion for books. When he wanted to start a business, along with two classmates, he wanted to do something with books. But, his pursuit to bring value to what he does, made him an online travel agent, with a difference.
Chennai-based Stayzilla claims to be the largest in the "alternate stays" segment, which books in the budget and value-stay segment. It also claims to be one of the top five online travel agents in the country and is aiming to become the leader in two months, and also expand operations to neighbouring countries.
Started in 2010, Stayzilla has more than 1,200 locations with over 20,000 properties in its platform. It has raised $20 million, Series-B round of funding, from Nexus Capital and existing investors Matrix Partners to fund its expansion plan.
Journey so far
Vasupal, or Yogi as his friends call him, learnt about computers first in 1999. Dropping out of college, he started undertaking freelance projects to develop web-based applications and e-commerce portals when he was 19 years old.
Soon, he wanted to launch an e-commerce portal of his own. After conducting market research, he and his classmates Sachit Singhi and Rupal Surana launched Stayzilla.
Singhi is the director, partnerships, at Stayzilla and takes care of daily operations.
A computer science engineer with an MBA from ICFAI B-School, Hyderabad, Sachit was working with a Tata group company for three years in their business development and corporate planning team before he decided to join Stayzilla.
Surana is the chief operating officer at Stayzilla. A software engineer by qualification, she worked in an information technology company before co-founding Stayzilla. Unlike other entrepreneurs, funds were never a major issue for Yogi and his friends. He was already earning enough and others decided to pitch in. Initially called Inasra.com, it was rebranded as Stayzilla in 2010, because they want to provide alternate "stay" in all "zillas" (districts) of the country. The market size then was $7-8 billion, but fragmented.
"I like fragmented markets," said Yogi, adding there was no other player in the segment then, and Internet penetration was low. The founders went and met hotel owners in Tier-II and Tier-III cities. The main challenge was to convince the hotel owners to use Stayzilla's services.
Stayzilla's USP is its focus on small towns, where it is a challenge for travellers and tourists to find budget hotels.
"Our ability to liaise between the customer and property, and seamlessly handle even complex orders and customer requests through our concierge service makes the experience hassle-free not just for the customer but for the property owner as well," said Yogi.
The company offers a unique customer service process of "assisted check-in" to ensure a simplified and enriched experience even in the smallest of hotels and towns.
Stayzilla.com also has a lot of interesting payment options which enable customers to book rooms with an advance or even split payment among three different cards, suiting the needs of the budget traveller. Nor do the customers need to worry about any possible change from what they had booked for. Stayzilla provides updates on the booking status and the team steps in to resolve discrepancies.
Sachit Singhi said the company hopes to close the financial year with a gross booking value of Rs 70 crore as compared to Rs 12 crore in 2013-14. "We are targeting Rs 500 crore gross booking value in 2015-16 as we are growing nearly 10 times year-on-year."
Stayzilla's margin is around 10 per cent. It broke even in 2009.
Value as key
Stayzilla believes in focussing on accommodation in places that traditional travel sites do not focus on.
Also, it focusses on the supply side while most other companies focus on the demand side.It also focuses on post-booking services, including following up with the hotel and ensuring comfort for the customer.
"We act more as a concierge than a simple online booking site," said Yogi.
Way forward
The company has set itself an ambitious target of increasing the number of properties to 100,000 from the current 20,000 or more properties, and doing 40,000 room nights a day as against the current 4,000 room nights a day, in the next two years.
It also has ambitions to go global.
The money which was raised recently will be used to get properties on board, said Yogi, adding the market which the company is catering to is estimated to be around $20 billion and another $20 billion is expected to be added as demand is picking up. "We are doing hardly 0.5 per cent and competition is doing about 0.4 per cent," said Yogi.
In the next two months, he is hopeful, that Stayzilla will be the largest player in this market. "Makemytrip currently does around 4,200-4,300 rooms night a day. We do 4,000 room-nights a day," said Yogi. "In the last six months, we have reached the second spot from the fifth."
In the next 18 months, the company also plans to offer solutions in the neighbouring countries. The company may go for one more round of fund raising.
Yogi declined to give details but said it would be higher than the money raised recently.
An expert from the online travel agency segment said Stayzilla has picked a niche segment and was growing there at a good pace. "I love their customer-orientated approach."
FACT BOX
Started: 2010
Promoters: Yogendra Vasupal, Sachit Singhi and Rupal Surana
Current status: More than 1,200 locations; 20,000 properties
Financials: Gross booking value of Rs 12 crore 2013-14
Target: Gross booking value of Rs 500 crore in 2015-16
Investors: Indian Angel Network, Matrix Partners and Nexus Partners
EXPERT TAKE
We met the team in 2012 and invested in the company in 2013. Yogi and his team got deep understanding of the market and they have the passion.
He is an entrepreneur who has real insight and vision for the long term will stay ahead. The team is the sharpest in the market and they know the owners and customers' needs which helped them to scale their business nearly 12-fold in over two years by building an end-to-end product.
For instance, from the supplier (property owners)'s point of view the challenge for them is to give the best customer experience and they want to do that through a reliable platform.
Stayzilla helps the property owners to deliver great service to customers. From the time of booking till the time of checking out it keeps track and helps customers.
As a fund, two key things which we will look at in any entrepreneur or investment is how the company will grow faster and whether working with the entrepreneur will be a pleasure, Yogi and team have checked both the boxes.
The ey challenge for Stayzilla would be how rapidly they are going to build up a platform which can tap mobile technology.
Chennai-based Stayzilla claims to be the largest in the "alternate stays" segment, which books in the budget and value-stay segment. It also claims to be one of the top five online travel agents in the country and is aiming to become the leader in two months, and also expand operations to neighbouring countries.
Started in 2010, Stayzilla has more than 1,200 locations with over 20,000 properties in its platform. It has raised $20 million, Series-B round of funding, from Nexus Capital and existing investors Matrix Partners to fund its expansion plan.
Journey so far
Vasupal, or Yogi as his friends call him, learnt about computers first in 1999. Dropping out of college, he started undertaking freelance projects to develop web-based applications and e-commerce portals when he was 19 years old.
Soon, he wanted to launch an e-commerce portal of his own. After conducting market research, he and his classmates Sachit Singhi and Rupal Surana launched Stayzilla.
Singhi is the director, partnerships, at Stayzilla and takes care of daily operations.
A computer science engineer with an MBA from ICFAI B-School, Hyderabad, Sachit was working with a Tata group company for three years in their business development and corporate planning team before he decided to join Stayzilla.
Surana is the chief operating officer at Stayzilla. A software engineer by qualification, she worked in an information technology company before co-founding Stayzilla. Unlike other entrepreneurs, funds were never a major issue for Yogi and his friends. He was already earning enough and others decided to pitch in. Initially called Inasra.com, it was rebranded as Stayzilla in 2010, because they want to provide alternate "stay" in all "zillas" (districts) of the country. The market size then was $7-8 billion, but fragmented.
"I like fragmented markets," said Yogi, adding there was no other player in the segment then, and Internet penetration was low. The founders went and met hotel owners in Tier-II and Tier-III cities. The main challenge was to convince the hotel owners to use Stayzilla's services.
Stayzilla's USP is its focus on small towns, where it is a challenge for travellers and tourists to find budget hotels.
"Our ability to liaise between the customer and property, and seamlessly handle even complex orders and customer requests through our concierge service makes the experience hassle-free not just for the customer but for the property owner as well," said Yogi.
The company offers a unique customer service process of "assisted check-in" to ensure a simplified and enriched experience even in the smallest of hotels and towns.
Stayzilla.com also has a lot of interesting payment options which enable customers to book rooms with an advance or even split payment among three different cards, suiting the needs of the budget traveller. Nor do the customers need to worry about any possible change from what they had booked for. Stayzilla provides updates on the booking status and the team steps in to resolve discrepancies.
Sachit Singhi said the company hopes to close the financial year with a gross booking value of Rs 70 crore as compared to Rs 12 crore in 2013-14. "We are targeting Rs 500 crore gross booking value in 2015-16 as we are growing nearly 10 times year-on-year."
Stayzilla's margin is around 10 per cent. It broke even in 2009.
Value as key
Stayzilla believes in focussing on accommodation in places that traditional travel sites do not focus on.
Also, it focusses on the supply side while most other companies focus on the demand side.It also focuses on post-booking services, including following up with the hotel and ensuring comfort for the customer.
"We act more as a concierge than a simple online booking site," said Yogi.
Way forward
The company has set itself an ambitious target of increasing the number of properties to 100,000 from the current 20,000 or more properties, and doing 40,000 room nights a day as against the current 4,000 room nights a day, in the next two years.
It also has ambitions to go global.
The money which was raised recently will be used to get properties on board, said Yogi, adding the market which the company is catering to is estimated to be around $20 billion and another $20 billion is expected to be added as demand is picking up. "We are doing hardly 0.5 per cent and competition is doing about 0.4 per cent," said Yogi.
In the next two months, he is hopeful, that Stayzilla will be the largest player in this market. "Makemytrip currently does around 4,200-4,300 rooms night a day. We do 4,000 room-nights a day," said Yogi. "In the last six months, we have reached the second spot from the fifth."
In the next 18 months, the company also plans to offer solutions in the neighbouring countries. The company may go for one more round of fund raising.
Yogi declined to give details but said it would be higher than the money raised recently.
An expert from the online travel agency segment said Stayzilla has picked a niche segment and was growing there at a good pace. "I love their customer-orientated approach."
FACT BOX
Started: 2010
Promoters: Yogendra Vasupal, Sachit Singhi and Rupal Surana
Current status: More than 1,200 locations; 20,000 properties
Financials: Gross booking value of Rs 12 crore 2013-14
Target: Gross booking value of Rs 500 crore in 2015-16
Investors: Indian Angel Network, Matrix Partners and Nexus Partners
EXPERT TAKE
We met the team in 2012 and invested in the company in 2013. Yogi and his team got deep understanding of the market and they have the passion.
He is an entrepreneur who has real insight and vision for the long term will stay ahead. The team is the sharpest in the market and they know the owners and customers' needs which helped them to scale their business nearly 12-fold in over two years by building an end-to-end product.
For instance, from the supplier (property owners)'s point of view the challenge for them is to give the best customer experience and they want to do that through a reliable platform.
Stayzilla helps the property owners to deliver great service to customers. From the time of booking till the time of checking out it keeps track and helps customers.
As a fund, two key things which we will look at in any entrepreneur or investment is how the company will grow faster and whether working with the entrepreneur will be a pleasure, Yogi and team have checked both the boxes.
The ey challenge for Stayzilla would be how rapidly they are going to build up a platform which can tap mobile technology.
The writer is Rajinder Balaraman, vice-president, Matrix Partners (the fund is an investor in Stayzilla)