Indian budget chain Zostel raises $1 millionNews / Distribution | OnlineBy Karthick Prabu | May 14, 2014Share This article was originally published on Backpacker-focused hostel brand Zostel has raised around $1 million from Presha Paragash, an angel investor from Southeast Asia.The India-based startup will be using the fund to expand to other major cities in India and ramp up its technology.Paragash will also be joining Zostel’s board.Founded in August 2013, the company has seven co-founders: Dharamveer Chauhan, Paavan Nanda, Akhil Malik and Tarun Tiwari - all are recent graduates from IIM Calcutta; other co-founders, Chetan Singh Chauhan and Abhishek Bhutra are from IIT-BHU, and Siddharth Janghu graduated from MDI Gurgaon.Currently, Zostel operates its hostel in Jaipur and Jodhpur in India, and it has plans to launch in international markets once the Indian operations have scaled.Tech implementation plansTnooz spoke to co-founder, Dharamveer Chauhan, to understand the company's plans to leverage technology.Zostel will be rolling out an in-house property management system to centralize its inventory, content and other operations-related data.The current website will undergo a massive change to bring in more robust booking process, and many new features including the ability for the user to even see the dorm number assigned upon booking.The key element of the new website will be a new backpacker-focused user community for fostering backpack travel. A mobile version of Zostel booking service is also underway.Also, the company is working on a process to handover RFID enabled cards for Zostel users that will enable seamless entry to rooms, and also for the lockers.Zostel will be increasing its distribution reach by making its inventory available in a lot more third party channels. Currently, Zostel lists in sites such as MakeMyTrip, and HostelWorld.45,000+ (organic) Facebook fans in six weeksZostel, though a physical hostel for backpackers, has significantly leveraged technology in the past eight months of operation.The startup made an internship announcement via a dedicated website. The rule of the internship was: Five people will be asked to travel for 50 days (Zostel defines the itinerary) in India, with all travel expenses paid. The only expectation from the interns were that they have to take pictures, and blog about their daily travel experiences. And, to top it all, the company pays Rs 50,000 per intern to do this.Share this quote The idea of this internship was to promote backpacking travel in India. But, while doing this, the company also put on its digital marketing cap to reap the best benefit.Everyone interested to apply for the internship were asked to login via their Facebook ID. After the login, users were presented with eight online rounds that they have to complete.The rounds include, uploading a backpacking-related photo in social media, posting a status message by tagging Zostel, inviting Facebook friends, etc. This entire internship recruitment exercise was driven around the concept of gamification.By this internship process, the company's Facebook fan page increased organically from about 800 to 45,000+ in about six weeks, it got ten million impressions in Facebook, and attracted over 70,000 internship applications.The company had the technology to track every action (with respect to the internship site and Zostel brand) performed by every user during this internship campaign.Chauhan says the expense of this internship process would be negligible compared to the benefit gained out of it.