Korean resort agency Yanolja strikes into Southeast Asia with $15M funding in Zen Rooms – TechCrunch
Zen Rooms, the price range resort community startup based by Rocket Web, had confronted the deadpool earlier this yr after a potential funding deal collapsed, however now the enterprise seems to have discovered a house. Korea’s Yanolja, a preferred motel model that has branched out into app-based resort bookings, has made a strategic funding that would see it absolutely purchase the enterprise.
Ten-year-old Yanolja is initially paying $15 million for an undisclosed “strategic non-controlling stake,” however it’ll retain the rights to purchase 100 p.c of the Zen Rooms enterprise. Zen Rooms clarified that the acquisition is an possibility and never based mostly on efficiency or monetary metrics.
Based by a former resort employee, Lee Su-jin, Yanolja is finest recognized for its lovel motels though it’s attempting to wash up the overall picture of short-stay motels by selling them as locations for enterprise vacationers, vacationers and households, as famous by a Bloomberg profile story. The corporate has additionally grown its personal app-based reserving service which among the many most utilized in its homeland with 20,000 rooms.
The corporate is reportedly planning an IPO, so growth is on its thoughts.
For these causes, Zen Rooms suits that new focus. The corporate borrowed the price range resort mannequin, first pioneered by SoftBank-backed Oyo in India, and introduced it to Southeast Asia when it launched three years in the past. The idea is straightforward, Zen Rooms ensures minimal requirements in any respect motels together with free WiFi, contemporary towels and bedding, scorching showers, and so forth all of which is managed through a cellular app. These requirements are regular to most resort stayers, however when touring within the East, requirements can range wildly particularly at price range motels, which Zen Rooms is concentrated on.
For motels, Zen Rooms manages the model — and typically extra — and it permits helps them faucet the web to search out clients and bookings.
Right now, Zen Rooms is energetic in six cities in Southeast Asia — it had beforehand additionally run operations in Brazil, Hong Kong and Sri Lanka — throughout which it claims to function 1,000 resort franchisees with a listing of greater than 7,000 rooms. Its rivals in Southeast Asia embrace Crimson Doorz, which raised $11 million earlier this yr.
The startup has raised $eight million from buyers up to now, together with a $four.1 million Sequence A final April that was led by Korea’s Redbadge Pacific and SBI Funding Korea with participation Asia Pacific Web Group (APACIG), the three way partnership fund in Asia between Rocket Web and Qatari operator Ooredoo.
Nevertheless, TechCrunch understands main funding deal of over $10 million fell aside in Q1 2018 which left the corporate with a quickly depleting runway. In consequence and as TechCrunch reported in March, the corporate was aggressively shopped to potential consumers, buyers and rival firms to be able to hold the enterprise afloat.
Yanolja has come to the rescue however a full buy-out seems to be like it will likely be depending on the corporate’s future efficiency, such is commonly the association with strategic offers made with a view to full possession. Rocket Web, which stays a significant investor in Zen Rooms, will hope that the deal goes as easily as Lazada, its e-commerce service that’s now owned by Alibaba.
Lazada ran out of capital in comparable circumstances in early 2016 and Alibaba, the Chinese language web big, got here to its assist with a $1 billion funding. Though that was a majority funding it wasn’t a full-on buyout. Alibaba later elevated its holdings till it absolutely owned the enterprise, and in the present day it’s a key a part of the agency’s abroad growth technique.
Already, TechCrunch understands from one supply that Zen Rooms has gone on a hiring spree in latest weeks after it closed the deal. It had earlier been compelled to make cutbacks to its workforce on account of cost-cutting following the collapse of the funding deal earlier within the yr.
“We now have the capital to speculate,” ZenRooms co-founder Kiren Tanna informed TechCrunch. “The deal has been in dialogue since earlier this yr…. we’re treating like an acquisition however that is the first step.”
Tanna added that the corporate plans to give attention to 5 markets in Southeast Asia, and an growth to Vietnam could also be within the pipeline quickly.
Supply hyperlink – https://techcrunch.com/2018/07/25/yanolja-zen-rooms/