Seedfund-backed V Resorts aggregates private properties in emerging tourist destinations and offers an experience-based opportunity for working professionals to plan quick getaways from the metros. Currently based in New Delhi, it plans to enter Mumbai by March 2015 and later expand into Bengaluru
After graduating from ISB in 2009, Aditi Balbir joined Bedrock Ventures, a Noida-based investment firm and was well into the venture capital and private equity game. The turning point came when a few friends approached her and shared their concerns over maintenance of properties they owned at tourist destinations. “Their concerns were primarily around maintaining the property, securing it and driving higher occupancy. That’s when a business idea struck me,” recalls Balbir. Her first destination was Uttarakahand where she found many such properties that had been built at scenic locations but faced similar challenges. “So, I made a list of 79 properties in Nainital alone, came back and decided that we would consolidate all these properties under one brand and maintain them,” she indicates. That’s how, in 2012, V Resorts came into being.
Setting the foundation
Balbir faced two big challenges during the early phase. One, since the property owners were not familiar with the brand name (V Resorts), they demanded a security deposit when handing over operations and maintenance. “The owners weren’t familiar with the concept of private equity and entrepreneurship. Thus, they hesitated to let us take ownership of it. This is something we never anticipated,” states Balbir. A second challenge faced was in improving customer offering. “Till 2012 our customer offering wasn’t great. After that, while we had a good proposition for the owners, we did not know how we were going to pitch the brand to our customers,” she admits.
As the V Resorts brand offering grew, with more properties being signed on to the platform and successful case studies being built, it could do away with the security deposit challenge. For the platform, the startup was initially positioned similar to an Airbnb or Makemytrip, where the property was maintained as it was. “We didn’t add anything new to the offering. Our pricing was affordable and we were a budget player in this segment,” notes Balbir. At this point, the resort’s average room rate was Rs. 2,500.
After operating in this space for two years, Balbir made a few observations about the industry, which led her to reposition the brand. “When someone is on a holiday, whether they pay Rs. 1,000 or Rs. 4,000, the service has to be impeccable. Moreover, now, there is an ongoing trend of experience-based travel and we wanted to capitalise on that,” reasons Balbir. Thus, in 2012, V Resorts repositioned itself as an experiential chain of boutique resorts and designed five key brand elements to reflect this positioning; a branded restaurant, a bar, a massage centre, a retail store and art and interiors inspired by local culture. “We wanted to give our customers a feel of the local flavour. Thus, we decided to procure food from the local farmers. And we also designed many handmade illustrations depicting the local flora and fauna,” explains Balbir. Since V Resorts is aimed at the leisure traveller and working professional, who is seeking a quick getaway from the stress of metro life, each resort is also equipped with Wi-Fi facilities, a reading table, television, lounger and such. After the repositioning V Resorts operates on an average room rate of Rs. 5,000.
Instead of adopting the profit-share model Balbir decided to share revenues from the top line. “When we sign a resort on our platform the owner doesn’t have much mindshare. The compliance and maintenance is handled by us and we operate on a revenue-share basis,” she says. The company has an IT system in place where an owner can log in anytime and view the sales happening at his/her resort.
During the ideation stage, Balbir put in her own money. Later the company was incubated by Bedrock Ventures and raised an undisclosed amount of funding. In October 2014, the startup raised a pre-Series A round of US $2 million from Seedfund. “We channelised these funds towards expanding our room capacity from 80 to 300, building technology infrastructure and investing in branding elements,” indicates Balbir. The startup plans to raise a fresh round of funding in 2015 largely to improve operations technology. “After reaching a critical mass of 10 to 12 resorts around New Delhi, we will enter the market for the next round of funding, which should be after April 2015,” she reveals.
“Our main aim is to provide an opportunity for a working professional to take a break from metro life. So, the concept of higher sales or occupancy during the holiday season doesn’t apply for us,” she elaborates. In fact, she adds that the resorts have witnessed a greater traction from October to December, than during the summer, when most people tend to take vacations. “We are essentially trying to mitigate this idea that vacations should be planned only during a particular season,” adds Balbir.
Currently, V Resorts operates six properties across Uttarakhand, Himachal Pradesh and Rajasthan, and is in the process of opening a new resort in Corbett. “Apart from this, we’ve signed up a farm-based resort in New Delhi, which we plan to convert into a wellness destination,” shares Balbir.
By March 2015, she plans to take the brand to Mumbai and then to Bengaluru. “Once we sign 10 resorts in Mumbai we will head to Bengaluru. Simultaneously, we will continue to add more resorts under our umbrella in New Delhi,” she says. In the long run, V Resorts plans to aggregate at least 30 resorts in each metro and also plans to capitalise on tourist destinations such as the Kashmir valley.
SETTING RIGHT THE INVESTOR-ENTREPRENEUR EQUATION
Prior to becoming an entrepreneur, Aditi Balbir pursued a career in the private equity and the venture capital space, where she worked with companies such as Baring Private Equity Partners, McKinsey & Company and Bedrock Ventures. Here, she shares the two key aspects that an investor looks for, before funding an entrepreneurial venture.
Innovation, scalability and market opportunity and performance play a key role when determining whether a startup is promising or not
More importantly, the attitude and interest of the founder and the management team can make or break a deal. By this, I mean, the team’s knowledge of the market and competition, each member’s education, work experience and such. It is a myth that failed entrepreneurs find it more difficult to raise funding. In fact, it’s quite the opposite. Investors encourage failed entrepreneurs and are more open to their ideas because they have already built a business and developed an insight about what works and what doesn’t
Founder: Aditi Balbir
Concept: An experience-based chain of boutique resorts which aggregates private properties in key tourist destinations to offer working professionals a quick getaway from metro life
Investors: Bedrock Ventures, Seedfund
Presence: Six properties across Uttarakhand, Himachal Pradesh and RajasthanBedrock Ventures Resorts Seedfund travel V Resorts