Wudstay raises $3 million from Mangrove Capital Partners and Nimbuzz’s Vikas Saxena

Wudstay.com, a budget accommodation aggregator, has raised $3 million in Series A Funding from Mangrove Capital Partners and Vikas Saxena, Chief Executive Officer, of messaging app Nimbuzz. Launched in June this year, Wudstay has been able to raise its second round of funding; the Pre-Series A round of funding being the first where it raised an undisclosed amount from investors.

"The Budget Hotel segment is highly unorganized and there’s a huge opportunity to define the standards and best practices. The work that Wudstay has already done in this segment made it an obvious choice for us,” says Mark Tluszcz, Founder & CEO, Mangrove Capital Partners.

Talking about the investment in the venture, Vikas Saxena, CEO, Nimbuzz says, “In my past ventures, I have looked at scenarios where tech advancements can disrupt a large inefficient market and make the services cheaper and better for the consumers. With Internet penetration reaching critical mass in emerging markets I think the time is ripe to repeat the same in budget stay category. With travel market size in India hitting a new high in 2015, there is a huge potential for the travel technology platform that Wudstay has built.”

Wudstay is an online marketplace that allows users to book standardized rooms in guest houses and small hotels. The venture, currently, has a presence both in Jaipur and Gurgaon.

“We provide standardized rooms to travelers within a certain budget. We have launched a technology platform (wudstay.com) as a marketplace for travelers and accommodation partners. We are building a strong technology-based system to deliver a high quality experience to our customers,” says Prafulla Mathur, Founder and CEO, Wudstay. He is a serial entrepreneur who started the mobile app development company Queppelin, which counts Facebook, Snapdeal and Gaana.com among its clients.

Addressing issues

The budget segment of the hospitality industry is highly unorganized. The lack of transparency and standards in the segment is a major cause of concern for consumers. The accommodation claims made by budget hotels are not transparent and the ground reality is usually completely different. This has caused a trust deficit in this segment. Travel Booking and Holiday companies look the other way so that there is no disruption in their travel business.

“The idea behind our service is to take up the challenge head on and build faith with the customer. We have built a platform to help facilitate this. We claim to provide quality rooms and aim to meet the promises made to our consumers. We want our consumers to be confident about the quality of accommodation promised on our platform,” says Prafulla. He adds that the demand for high quality service in this segment is what drew him into the venture..

Strategy

India’s growing travel market size, which is expected to touch $25 billion this year, offers a huge opportunity to the hospitality industry. In this segment various players are adopting inventive sales measures and offering innovative packages. The size of the market is allowing different players to jump-in and innovate.

Wudstay has a technology oriented approach and is building a robust platform. It is also targeting customers across various travel segments - from business travelers to leisure travelers, and from medical tourism and to packaged holidays.

Funding and expansion

“We are operating in two cities, namely Gurgaon and Jaipur. In these two cities we have 40 hotels which give us an inventory of over 400 rooms per night. We spent the early fund monies on taking these hotels on board. Besides, the amount was spent on building the technology and the team,” says Prafulla.

The venture plans to spend the Series A funding for further expansion. It plans to expand to 65 cities in the next 18 months.

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