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Luxury villa rental startup StayVista has raised more than INR 40 Cr (about $5 Mn) in a strategic funding round led by DSG Consumer Partners. The round also saw participation from investors like Capri Global and CA Holdings.

The startup will use the funds to scale operations and ramp up its tech infrastructure. StayVista will also use the investment to fuel growth, hire more and expand its network. 

“In the coming years, we need need to achieve growth at scale and to achieve that, we need to spend more on the tech side, towards brand spends and we also want to spend on creating experiences for our users,” StayVista’s head of partnerships and cofounder Ankita Sheth 

Echoing the sentiment, DSG Consumer Partners’ India head Hari Premkumar said, “The founders are building business sustainably with certain markets already achieving healthy operating margins…In India as well, we expect the segment (vacation rentals) to expand further and StayVista is well poised to make the most of this opportunity.”

A chance encounter between Sheth, Amit Damani, Pranav Maheshwari led to the founding of Vista Rooms in 2015. At the outset, the startup operated as an online budget accommodation aggregator and allowed users to scout properties and book hotels of their choice.

Later, it pivoted to the luxury villa rental market and currently operates in the niche market. 

Creating A New Turf?

“We are a new age hospitality brand as we aren’t looking traditionally at hospitality. Be it capital expenditure or having a lot of people on the property to take care of it, we are not tackling the issues traditionally,” StayVista’s marketing and sales head Damani said.

Damani added that the startup is focused on ensuring the ‘best experience’ for its users in a capital-efficient manner.

StayVista operates in two verticals – business-to-customer (B2C) and business-to-business (B2B). 

The B2C vertical focuses solely on online customers, allowing users to hunt villas online and book them. The startup claims to have more than 500 villas across 50 cities listed on the platform.

It also partners with other online travel aggregators, including MakeMyTrip (MMT), Goibibo and Airbnb, to list its properties online and to shore up bookings. 

Sheth said that StayVista operates on a 70:30 revenue sharing model for its B2C segment, taking 30% of the total booking amount. 

In the B2B vertical, the startup also works with property owners to take care of maintenance and other chores to ensure upkeep of the property. It charges a fee from the homeowners, apart from the regular service charge incurred for listing.

However, in response to a question, Sheth reiterated that B2C is the core focus of the company, adding that StayVista continues to be a ‘consumer brand’.

Damani told Inc42 that the startup has served more than 3 Lakh customers in the last 5 years and plans to cater to a million guests in the next 2-3 years. StayVista is targeting a revenue of INR 1,000 Cr, with plans to onboard more than 2,500 villas by financial year 2024-25 (FY25), he added.

The startup claims to have a workforce of 300 employees, with plans to scale this number to 1,000 by FY25.

In response to a question about its global foray, Damani said that the startup would focus only on India for the next 18-24 months. StayVista would look at international expansion, especially in Dubai, Sri Lanka, Maldives and other places, much later. 

It also plans to strengthen its presence in new geographies within India, especially in Tier-II, III and IV cities.  

StayVista counts marquee names such as Singapore Angel Network, Sequoia India’s Rajan Anandan and Everest Flavours’ Anand Ladsariya among its backers. 

According to Statista, the Indian vacation rentals segment is projected to notch up revenue of $1.44 Bn in 2022. This number is expected to soar to $2.1 Bn by 2026, growing at a CAGR of 10.05%.