Treebo fired 20% of staff when the funding its growth bet counted on fell through

In July 2019, Ruptub Solutions — the Bangalore company behind budget-hotel chain Treebo — fired 100 to 120 employees, about 20% of its workforce, citing a "large" potential investment round that fell through, per three people familiar with the development. The Economic Times had reported in May 2019 that French hotel group Accor was in advanced talks for up to $40 million. Employees said the news came as a shock because the whole company had been on an aggressive hiring spree; staff received a month of severance and an assurance of job recommendations.

It was the second round of cuts in a year. In July 2018, Treebo had laid off 70–80 employees after online travel agency MakeMyTrip stopped listing the company and deepened its relationship with Oyo Rooms instead. The backdrop was a capital war: SoftBank-backed Oyo had just raised $1 billion from Didi Chuxing, SoftBank and Grab, and an investor in the space described fear of the capital power Oyo commanded among growth-stage investors, even in a market that was not winner-take-all.

Treebo was founded in March 2015 by IIT Roorkee graduates Rahul Chaudhary, Sidharth Gupta and Kadam Jeet Jain, and had last raised $34 million in 2017, led by Hong Kong hedge funds Ward Ferry Management and Karst Peak Capital. The company did not respond to ET's emailed query.

100–120 jobs cut in July 2019 — about 20% of the company — with one month's severance; 70–80 more had been cut in 2018 after MakeMyTrip delisted Treebo.

The company kept hiring aggressively for its fight with Oyo while its runway depended on a new round that was never guaranteed.

MakeMyTrip's 2018 delisting had already cut off a major distribution channel — the earlier 70–80 layoffs reflected that loss.

Oyo's $1 billion raise reset investor expectations for how much capital the budget-hotel war required.

Growth spending sized to a rival's war chest is a bet on the next funding round — when it slips, the payroll is what gives.

Treebo did not respond to ET's query. The cuts left departing staff with about a month's severance and the chain a smaller team to compete against Oyo, whose $1 billion war chest kept raising the cost of the budget-hotel war. No replacement investor was announced in the report.