Singapore-based hospitality startup, RedDoorz has raised US$70 million in a Series C funding round led by Asia Partners, Rakuten Capital, and Mirae Asset-Naver Asia Growth Fund, with participation from existing investors, Qiming Venture Partners and International Finance Corporation (IFC). The startup, which primarily focuses its operations in Southeast Asia, plans to utilise the funds to build a second engineering hub in Vietnam, expand into new territories, and also scale its technology.
The company’s Vietnam engineering hub will be complementing the current regional technology hub based in India. The company is also in a process to ramp up its hotel staff and quality training programmes across all properties in Singapore, Indonesia, Vietnam and the Philippines. Meanwhile, the latest funding brings the total amount of funds raised by the company to approximately US$140 million.
Launched in 2015 by Amit Saberwal and Asheesh Saxena, RedDoorz first started its operations from Indonesia, and later moved its headquarters to Singapore in 2017. The company statement citing Saberwal, said, “This new round is a testament to our strong business growth and market leadership position we were able to build during the last few years. We see tremendous opportunities to continue growing our platform and expanding into new markets.”
“We believe we are on the right track to create the next tech unicorn in Southeast Asia and with the backing of our new investors, who bring deep expertise building large successful tech and digital businesses in our region, we are well positioned to fully execute on our strategy and mission,” he added.
RedDoorz operates in a franchise-led business model with asset-light budget hotels as partners in more than 80 Southeast Asian cities in countries including Singapore, Indonesia, the Philippines and Vietnam. As on July 2019, the company claimed to be operating more than 25,000 rooms spread across 1,200 budget hotels and properties in the Southeast Asian region. At the time, the company said to have grown 5x YoY.
The statement citing co-founders and Partners of Asia Partners, Oliver Rippel and Nicholas Nash, said, “Our mission is to help build and mentor Southeast Asia’s next generation of tech unicorns. Our team has a unique combination of investing and operating skills to help companies such as RedDoorz become true market leaders. We have every confidence in the team’s ability to capture the enormous opportunity which exists in the affordable travel segment.”
Japan-headquartered Rakuten Capital has previously invested in regional leading companies such as Gojek, Carousell and Shopback. Whereas, Mirae Asset-Naver Asia Growth Fund is a joint venture capital firm, which counts HappyFresh and BigBasket as portfolio companies and also recently participated in Grab’s US$1 billion Series H round.
According to a 2018 report by Google and Temasek, the market valuation of Southeast Asia’s online economy reached US$72 billion last year, and is expected to triple to US$ 240 billion by 2025. The same report points online travel as the largest and most established vertical, reaching US$30 billion in gross bookings value (GBV) in 2018, and heading towards US$78 billion GBV by 2025.
This has fueled the growth of Southeast Asia’s affordable accommodation in the hospitality industry to a tremendous pace, which according to market research firm Phocuswright is currently valued at US$17 billion, and is up for a potential market valuation to reach US$20 billion by 2023.