Hospitality company Ruptub Solutions, which owns and operates Treebo Hotels, has fired 100-120 employees, or about 20% of its workforce, three people familiar with the development told ET.
The company cited a “large” potential investment round falling through as the reason for the retrenchment, according to an employee who spoke to ET on the condition of anonymity.
ET reported in its May 11 edition that French hotel chain, Accor SA, was in advanced discussions for an up to $40 million investment in Treebo. Accor operates across various price categories, with brands such as Sofitel, Ibis, Raffles, Novotel, and Mercure.
“The regional business heads communicated this to us, and it came as a shock since the whole company was on an aggressive hiring spree,” an employee told ET. “We have been given a month of severance pay, and an assurance of a recommendation for a job.”
In July last year, Treebo had laid off 70-80 employees after online travel agency MakeMyTrip stopped listing the company on its platform, instead choosing to deepen its relationship with OYO Rooms.
“Due to some unfortunate sequence of events at the company I worked with till yesterday, many of us have been asked to leave on an immediate basis. Though the exact number of layoffs is not yet out in public domain, a very large number of people have been hung out to dry,” another employee posted on professional networking site LinkedIn.
Treebo Hotels did not respond to ET’s emailed query.
A bunch of startups in the real estate and ancillary businesses have been under pressure to raise larger rounds to fight the Softbank-backed Oyo, which most recently raised $1 billion from Chinese ride-hailing firm Didi Chuxing, SoftBank, Singapore-based ride-hailing company Grab, and others.
“Even though this is not a winner-takes-all market, there is fear of the capital power that Oyo commands amongst growth stage investors,” said a person who has invested in the space.
Treebo, founded in March 2015 by IIT-Roorkee graduates Rahul Chaudhary, Sidharth Gupta and Kadam Jeet Jain, last raised $34 million in August 2017, led by Hong Kong-based hedge funds Ward Ferry Management and Karst Peak Capital.
Venture capital fund Matrix Partners and SAIF Partners are early investors in Treebo.
It operates more than 500 properties across 90 cities in India, with 10,500-11,000 rooms under management.