Description
goSTOPS is a youth hostel chain that leases, manages, franchises real estate assets, which are then designed, transformed, marketed, sold, and operated as youth hostels in business and leisure locations preferred by millennials.
A high-quality dorm bed in a goSTOPS youth hotel is priced between INR 400-800 per night depending on destination and city demand. And a high-quality private room for 2 occupants is priced between INR 1000-3000 depending on destination and city demand. The youth-focused 24×7 standardized F&B offering is priced at INR 50-250 per item.
The company is looking to tap the burgeoning millennial and Generation Z travel market, which gravitates towards aspirational and unique experiences rather than luxuries or amenities. The millennial tourist market presents a $100 Bn opportunity for businesses in India and Southeast Asia by 2024.
Currently, the startup operates 28+ hostels in Agra, Amritsar, Bir, Dalhousie, Delhi, Jaipur, Jaisalmer, Mumbai, Naggar, Rishikesh, Udaipur, and Varanasi, with a total capacity of 1000+ beds across India. In 2019-20, we did net sales of INR 6.75 Crores. Out of this total sale, revenue booked on our P&L was 3.96 Crores. The rest was booked on franchisee books. In July 2021, we did monthly net sales of INR 56 Lakhs, and revenue booked on our books was INR 33 Lakhs. As of July 2021, we have recovered to 125% of pre-covid revenue levels.
Funds raised from investors in April 2021 were used to:
- Expand to 28 Hostels / 1900 Beds. Over 85% company operated.
- Build entire first level leadership team.
- Build 360 marketing capability
- A central team of 55 people is strong and best in the segment
Details of the current round
For this round via CCPS, the company is maintaining similar terms as the last round assuring min. 50% IRR to incoming investors upon conversion at Series-A.
Key differences to the April 2021 round are:
The valuation cap has been moved from INR 34 crores to INR 55 Crores (as the post-money valuation cap of the last round was INR 41 Crores and they have already grown 1.5x from 19 hostels to 28)
The valuation floor has been moved from 11.67 Crores to 18.67 Crores (adding capital raised INR 7 Crores)
The company is looking to raise 60 lacs from Lead Angels Network. The minimum commitment to the company for any new incoming investor is INR 15 Lakhs(this does not apply to existing investors re-investing as part of this round). In case commitments exceed the ask amount, allotment will be on the “First Come, First Serve” basis.
