Skip to content
Exclusive: Nikhil Vora-led Sixth Sense Ventures invests in micro-hospitality startup
| July 17, 2018
Sixth Sense Ventures has struck a new deal in the country's growing micro-hospitality sector, Nikhil Vora, founder of the consumer sector-focussed venture capital firm told VCCircle. The VC firm has invested in SaffronStays, Vora said without disclosing the investment amount. However, a person close to the transaction said that the deal value was $2 million. The company will use the funds to boost its growth, hire talent, and expand its inventory in a growing micro-hospitality industry that could be pegged at $40 billion, said Vora. SaffronStays, which was launched by Devendra Parulekar and Tejas Parulekar in 2015, curates and manages hospitality operations, reservations, branding and marketing for private vacation homes owned by high-net-worth individuals (HNIs). The company currently operates 45 homes across six states in the country and hosts over 1,500 guests every month. SaffronStays has expanded from five employees to 22 in two years and has also trained over 150 caretakers, supervisors, managers, and housekeeping staff members across the country, with a dedicated training centre in Ulwe, Maharashtra. "Sixth Sense Ventures' experience with consumer-facing businesses is something we will heavily lean on in our next growth stage," said Tejas, co-founder, SaffronStays. The premium homestay market in India is expected to grow as Indian travellers are on the cusp of becoming experiential and demanding by looking for unique travel experiences, said Vora. "Weekend plans to de-stress and bond with families and friends have been largely trending in cities, and premium homestays located within 3 hours from city limits make for the most preferred short holiday destinations," added Vora. Homestays have become an alternative to hotels for travellers and large online hotel aggregators such as MakeMyTrip and Yatra have entered this space. The sector has also seen challenges as last year the shutdown of homestay aggregator Stayzilla, once touted as India’s Airbnb and backed by venture capital firms Nexus and Matrix Partners, triggered discussions on the pointless pursuit of discounts-based growth over unit economics and the rat race of valuations. Sixth Sense Ventures The VC firm's first fund had a corpus of Rs 125 crore with investments in 10 companies. These include gaming arcade operator Smaaash Entertainment Pvt. Ltd; Hindustan Foods Ltd, which makes PepsiCo Inc.’s Kurkure snack brand; oral care products company JHS Svendgaard Laboratories Pvt. Ltd, and hyperlocal logistics service provider Grab. The second fund has a target corpus of Rs 350 crore ($54 million) and was aiming to mark the first close by March this year. Sixth Sense made two investments from its second fund in March – AVG Logistics and Eupheus Learning. Last month, the VC firm marked its foray into the healthcare sector by investing in Fullife Healthcare Pvt. Ltd, which sells sports nutrition supplements under the brand Fast & Up. Vora also invests in his personal capacity. His most recent bet was in a Mumbai-based specialty food ingredients maker. Some of his other investments include glitter-powder maker Advance Syntex Ltd; Fogg deodorant maker Vini Cosmetics; sanitary napkins maker Soothe Healthcare; sports-focussed digital display solutions firm Technology Frontiers; and aircraft maintenance and repair company AirWorks, to name a few. Vora was also an early investor in One97 Communications Ltd, the parent of digital wallet firm Paytm. He sold his stake in One97 to Chinese e-commerce giant Alibaba in May last year, reaping almost 75-fold gains. Around the same time, he exited Kangaroo Kids Education Ltd when it was acquired by EuroKids International Pvt. Ltd.
SaffronStays raises about $2M funding from Sixth Sense Ventures
| July 17, 2018
Micro-hospitality startup SaffronStays has about $2 million from consumer-centric venture capital firm Sixth Sense Ventures. The pre-series A investment marks the first institutional round into the firm and will help SaffronStays expand the number of holiday properties under its platform. Founded in 2015 by Devendra and Tejas Parulekar, SaffronStays curates and manages hospitality operations, reservations, branding and marketing for private vacation homes owned by high networth individuals. The firm currently operates 45 homes across six states in India and claims to host over 1,500 guests every month. “We are excited to have Sixth Sense Ventures as our partners in our entrepreneurial journey. We hope to use this money to expand our footprint, work on innovative business models, strengthen our operations and improve our technology backbone,” said Devendra Parulekar, Founder of SaffronStays. As part of this investment, Nikhil Vora, Founder & CEO of Sixth Sense Ventures will join the board of SaffronStays. Hospitality being a high margin sector, SaffronStays claims to be cash flow positive at a unit level even as it clocks about Rs 5 crore in annual revenues. “The Indian travel market is massive and yet underserved. We believe that SaffronStays is very well equipped to capture this market with its exclusivity and well-curated offerings and parallely create an opportunity for homeowners to monetize their most valuable and expensive asset,” said Vora on the investment. Currently operational around Mumbai, Pune, Goa and a few locations around Uttarakhand, Rajasthan and Tamil Nadu, the firm is looking to scale to about 125 properties by the end of 2018 even as it looks to scale to over 1,000 homes over the next 5 years.