WudStay Travels Pvt Ltd, which owns and operates online room booking portal WudStay.com, has raised $3 million in Series A funding from venture capital firm Mangrove Capital Partners and Nimbuzz CEO Vikas Saxena.
WudStay will use the money to ramp up its technology platform, increase team size and expand operations, the company's founder Prafulla Mathur, said.
As part of the investment, Saxena and a representative of the Luxembourg-based Mangrove Capital have joined WudStay's board, said Prafulla Mathur, the company's founder.
WudStay, which was established earlier this year, has tied up with guest houses and boutique hotels in Gurgaon and Jaipur. It has joined hands with around 40 guest houses for 400 rooms. The rooms offered on the WudStay network are priced between Rs 999 and Rs 1,299. The startup aims to venture into 65 cities over the next few months.
WudStay would compete with the likes of Zip Rooms, Oyo Rooms and Zo Rooms for a slice of the growing budget hotels aggregation space.
Mathur had earlier founded mobile app development company Queppelin, which has clients such as Gaana.com, Facebook and Snapdeal, among others. Previously, he was associated with IT firm Mastek.
The WudStay investment would be Mangrove Capital's latest commitment in India. In February, the VC firm had invested in LocalCube Commerce Pvt Ltd, an e-commerce enabler for offline stores in small towns, which operates under the StoreKing brand. It has also backed Skype and Nimbuzz.
The 35-year-old Saxena, who founded instant messaging and mobile calling application firm Nimbuzz in 2008, is an IIT-Delhi alumnus. Previously, he worked in companies such as Deutsche Telekom, Bharati Airtel and Aircel.
Hotel aggregation ventures have been attracting a lot of investor interest. Last month, Bangalore-based Treebo Hotels raised $6 million co-led by Matrix Partners India and SAIF Partners.
In March, Delhi-based Oravel Stays Pvt Ltd, which runs an online marketplace for branded budget hotels OYORooms.com, raised Rs 150 crore ($24 million) in a new investment round led by Greenoaks Capital.
Stayzilla, an unbranded budget hotel accommodation booking platform, had raised $15 million in Series B in February this year from Nexus Venture Partners and existing investor Matrix Partners India.
Meanwhile, yet-to-launch online venture for branded budget hotel chain Zen Rooms, co-founded by Via.com's Vinay Gupta, has raised $1 million from former CEO of Kingfisher Airlines Sanjay Aggarwal and Kaneswaran Avili, former chief commercial officer of SpiceJet.