This funding round also saw participation from ITI Growth Opportunities Fund, Merisis Wealth Trust, and family offices. The Mumbai-headquartered startup claims that this is the largest institutional funding round raised by a backpacker hostel company in India.

The Hosteller plans to use the capital to expand across key travel destinations, strengthen operational efficiency, and build the brand.

The Hosteller Founder & CEO Pranav Dangi

Why girls' hostels will matter in higher education in India

Founded in 2014, The Hosteller operates over 75 properties across 13 states and has had over 20 lakh travellers utilising its facilities. The startup is targeting 25,000 beds nationwide within the next 36 months and is preparing to launch a travel super app integrating accommodation, F&B, mobility, and curated experiences into a single platform.

Pranav Dangi, Founder & CEO, The Hosteller, said, "We started The Hosteller because Indian travellers deserved better than a choice between overpriced hotels and unreliable budget stays. 11 years and 20 lakh travellers later, the model has proven itself."

Over the past 12 months, the startup has added over 30 properties and grown traveller capacity by nearly 70%, says The Hosteller.

PROMAFT Partners Founding General Partner Soham Avlani said,"India's travel market is being reshaped by a generation that values experience over star ratings, and we believe The Hosteller is best positioned to lead that 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."

This is PROMAFT Partners' second investment from its debut $100 million Series A/B fund, following its investment in internet services startup Wiom.

V3 Ventures co-founder Arjun Vaidya said, "We have been with Pranav since the Series A in 2024, and what he and his team have delivered since is remarkable, including the expansion pace, the consistency of experience across 75+ properties, and the operational discipline."

Edited by Swetha Kannan