Why we invested in goSTOPS: Blume Ventures leads $4.2 Million Series A round in goSTOPS
India is thriving, with the travel and hospitality industry experiencing significant growth post-COVID. This surge is contributing to India’s rise as a consumption-driven economy, driven mainly by its youth population. The demographic dividend is notably at play in the travel sector.
The travel industry is experiencing significant growth, fueled by domestic tourism, which soared to 2.5 billion visits in 2023, compared to 1.73 billion visits in 2022. The industry is projected to grow by over 11% annually, reaching a market size of $78.4 billion by FY27.
The government strongly supports travel and tourism by increasing spending on infrastructure projects like roads, railways, and urban development. Today, India is constructing approximately 27 kilometers of roads daily, with plans to invest over $1 trillion in infrastructure projects by 2030.
Multiple indicators suggest that India’s travel industry is poised for significant growth.
In 2024, India recorded 223 million air passengers, of whom 153 million were domestic travelers.
India’s airline fleet has 770 aircraft, with plans to add 1,000 more in the coming years, supported by major orders from IndiGo and Air India.
Hotel operators like IHCL, EIH, Chalet Hotels, and Lemon Tree Hotels have seen significant growth in revenue, margins, and share prices in the last few years.
Uttar Pradesh and Tamil Nadu were the top states for domestic travel in 2023, collectively accounting for over 500 million visits. These numbers are expected to rise dramatically in 2025, as evidenced by the Maha Kumbh Mela in January and February 2025, which witnessed a record-breaking attendance of 663 million people, making it the largest religious gathering ever recorded.
A key factor driving this impressive growth is India’s youthful demographic profile, with approximately 65% of the population under the age of 35. Our market analysis has taken a conservative approach by excluding nearly 50% of potential customers, recognizing segments unlikely or unable to travel, and others inclined toward higher average daily rate ADR accommodations.
However, the remaining demographic segment represents significant growth potential. This group dedicates over 30% of their discretionary spending to travel, typically seeking budget-friendly, experience-rich, and digitally-enabled accommodations. Their annual travel expenditure averages approximately ₹10,000/-, translating into a substantial revenue opportunity.
Blume research indicates that the budget hotel segment still suffers from highly fragmented supply, with most room inventory trapped in unbranded properties. This leads to inconsistent service standards and a complete absence of customer experience.
Image source: Blume Research
Our learning from businesses in our portfolio, such as Bhive in the coworking industry, demonstrates that asset sweating — optimizing infrastructure and real estate costs, establishing clear parameters for property allocation, and maintaining highly efficient operations — consistently pays higher dividends in the long run.
Our thesis was built around the idea that Gen‑Z values personal growth and transformation, and seeks extraordinary experiences in traveling, spending, and living arrangements. Initially, we conducted an in-depth evaluation of co-living spaces, gradually expanding our focus into adjacent areas with stronger customer retention, improved unit economics, and enhanced overall experiences.
In search of a stop, we met goSTOPS..
This brings us to our investment in goSTOPS, which is well-positioned to become a market leader in the experiential, budget-friendly, and tech first accommodation space. Co-founders Pallavi and Pankaj have been successfully building goSTOPS since 2014, capitalizing on the sharing economy through dormitory-style accommodations, centralized common spaces, and highly efficient space utilization (asset sweating in real terms) — key factors ensuring scalability and enhanced profitability. goSTOPS is already EBITDA profitable, managing 30 properties across 25 locations in 12 states.
Image Source: goSTOPS. Actual Images: Vibrant GenZ-focused Designs
goSTOPS converts budget hotels (20−40 rooms, 10,000−20,000 sq. ft.) into hostels accommodating 80 – 160 beds, divided into dormitories (70%) and private rooms (30%) at budget-friendly rates (₹500‑1000 per dorm bed, ₹2,000 – 4,000 per private room). goSTOPS focuses on creating inviting common areas with recreational events and social experiences, plus it operates with kitchenless F&B services, goSTOPS optimizes every square foot, maximizing revenue potential. Additionally, they offer in-destination experiences, enriching their value proposition for young travelers.
Advanced technology integration further differentiates goSTOPS by utilizing a full-stack operator model that delivers consistency and quality through their proprietary digital service delivery engine powering the goSTOPS app. This app facilitates seamless service delivery, including digital locks, efficient check-in/out, service ticket management, and food ordering. Additionally, community engagement is enhanced through goCONNECT, complemented by loyalty initiatives such as goCOINS, referral programs, and digital wallets. These combined features establish a powerful user-retention flywheel, driving organic growth and positioning goSTOPS ahead of traditional competitors.
Central to their strategy is a robust digital presence, with 60% of bed revenue generated via their proprietary app (40% through OTAs), which has garnered approximately 200,000 downloads and maintains an active user base of around 22,000. This strong digital footprint ensures consistent customer engagement and seamless booking experiences. Operationally, goSTOPS excels by maintaining an efficient employee-to-room ratio of 0.43, significantly outperforming the industry average of approximately 1.0.
Way Forward
Pallavi and Pankaj, have successfully established a strong business model by effectively managing unit economics. Scaling to 10,000 beds within two years presents significant growth potential, enabling revenue growth to 5X from the current run rate. As travel in India expands across leisure, work and religious pilgrimages, fuelled by GenZ’s quest for unique experiences, goSTOPS is uniquely positioned to cater to these diverse segments and build a strong brand around it.
We strongly believe that in highly competitive markets, one of your strongest moats is customer experience. The founders, Pallavi and Pankaj, deeply appreciate this and consistently prioritize customer needs and experience.
We are proud to partner with goSTOPS on this exciting journey.
Authors
Jatin Madhra (Investment team)
Ashish Fafadia (Investment team)