The round was led by PROMAFT Partners, with participation from V3 Ventures.
The company said the funding marks a turning point not just for its own growth, but for the broader evolution of backpacker hostels in India, which it argues are moving from a niche offering to a more mainstream accommodation choice among younger travelers.
“11 years and [2 million] travelers later, the model has proven itself,” said Pranav Dangi, founder and CEO of The Hosteller. “This round is about sustained acceleration to 25,000 beds and building the kind of company that can define this category for decades.”
Founded in 2014, the company said it has added more than 30 hostels in the last 12 months, increasing capacity by around 70%. The network now includes more than 70 hostels across 40-plus destinations.
Investors are betting that the hostel category will continue to grow. Soham Avlani, founding general partner at PROMAFT Partners, described the shift in travel behavior as structural rather than temporary.
The Hosteller also said its business fundamentals—including occupancy rates, repeat bookings and revenue per bed—are outperforming traditional budget hospitality models, underscoring the scalability of the format.
With the new funding, the company plans to expand to more than 150 hostels over the next 24 to 30 months and grow to 25,000 beds nationwide within three years.
The Hosteller said it is also developing a “travel super app” designed to integrate accommodation, food and beverage, mobility and curated local experiences into a single platform.
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