FabHotels raises $25 m from Goldman Sachs , Accel Partners

Budget hotels chain FabHotels has raised $25 million in a Series B funding round led by Goldman Sachs, a top company executive said.

FabHotels works on an assetlight model, partnering small hotels under a franchise model to provide standardized services. Accel Partners, an existing investor in FabHotels, also participated in the round. In July 2016, the start-up raised $8 million in a series A round from Accel Partners,RBInvestments,Mohandas Pai’s Aarin Capital and Qualcomm Ventures. “The focus in past 12 months has been on investing in technology. In the next 12 months, we want to triple our technology team and double the number of rooms from the 5,000 that we have today,” said Vaibhav Aggarwal, co-founder and CEO, FabHotels.

FabHotels was started in 2014 by Aggarwal and Adarsh Manpuria. Aggarwal had previously worked for coupon website GroupOn and helped set up online furniture retailer FabFurnish for German Internet giant Rocket Internet. Manpuria was previously at Rocket Internet as a venture development associate.

FabHotels has more than 225 franchise hotels in over 20 cities, including Mumbai, the National Capital Region (NCR) and Bengaluru, Aggarwal said. The firm typically partners with budget hotels having 20-40 rooms.

While it looks to double the number of hotel rooms under its platform, FabHotels will look to focus on select cities, which are business hubs.