ZEN Rooms, an economy and mid-range hotel aggregator in Southeast Asia, has received an undisclosed sum in investment from Yanolja, a leading travel group in South Korea.
Hong Kong- and Korea-based Access Ventures has joined as a co-investor in this round.
Yanolja has also acquired stakes from one of ZEN’s early investors and signed a strategic alliance with the Singapore-headquartered company.
With this, ZEN’s early investor Asia Internet Holdings (a joint venture of Rocket Internet and Ooredoo Telecom), has exited. However, other early backers RedBadge Pacific and SBI Korea will remain as investors.
ZEN and Yanolja will work to deploy automation technology to enhance customer experience and further reduce budget hotels’ operating costs.
Yanolja, backed by Booking Holdings and GIC, was the lead strategic investor in the company’s US$15M funding round in 2018.
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ZEN as founded in 2015 by entrepreneurs Kiren Tanna and Nathan Boublil. The startup operates 13,000 rooms across Southeast Asia. Since Yanolja’s investment in mid-2018, ZEN claims to have grown its revenues 400 per cent. It claims to be #1 in the Philippines.
ZEN CEO Boublil said: “With this strategic alliance, we are joining forces with one of the most technologically innovative travel groups and its unique backers Booking Holdings to create the first full-service budget and mid-range hospitality group in Southeast Asia. We will be able to deploy world-class technology infrastructure in IoT R&D, automation, hardware and software to all hotels in Southeast Asia.”
Yanolja is a provider of real-time travel-and-stay booking services connecting travellers to hotels, motels, private lodgings, guesthouses, and international accommodations.
In June 2019, Yanolja announced a capital raise of US$180 million funding from GIC and Booking Holdings at a valuation of over US$1 billion.
The ZEN Rooms deal is expected to further intensify competition in the budget hotels booking segment in Southeast Asia. OYO Rooms and RedDoorz are the two dominant players, who together enjoy a huge market share in the region.
OYO has a presence in over 800 cities, mostly in Asia. The company has already gained a foothold in Southeast Asian countries such as Indonesia, Malaysia, Thailand and the Philippines. OYO Rooms, in which SoftBank is an investor, is in the midst of raising US$1.5 billion in Series F round.
RedDoorz, which recently raised US$70 million in Series C round, is already a fast-growing hotel chain in Southeast Asia with over 1,500 properties across four countries. The company is expanding from its current network of 18 to a total of 29 properties in Singapore alone by the end of 2020.
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