Rocket Internet

Auto Added by WPeMatico

Korean hotel firm Yanolja moves into Southeast Asia with $15M investment in Zen Rooms

Zen Rooms, the budget hotel network startup founded by Rocket Internet, had faced the deadpool earlier this year after a prospective funding deal collapsed, but now the business appears to have found a home. Korea’s Yanolja, a popular motel brand that has branched out into app-based hotel bookings, has made a strategic investment that could see it fully acquire the business.

Ten-year-old Yanolja is initially paying $15 million for an undisclosed “strategic non-controlling stake,” but it will retain the rights to buy 100 percent of the Zen Rooms business. Zen Rooms clarified that the acquisition is an option and not based on performance or financial metrics.

Founded by a former hotel worker, Lee Su-jin, Yanolja is best known for its lovel hotels although it is trying to clean up the general image of short-stay hotels by promoting them as destinations for business travelers, tourists and families, as noted by a Bloomberg profile story. The company has also grown its own app-based booking service which among the most used in its homeland with 20,000 rooms.

The company is reportedly planning an IPO, so expansion is on its mind.

For those reasons, Zen Rooms fits that new focus. The company borrowed the budget hotel model, first pioneered by SoftBank-backed Oyo in India, and brought it to Southeast Asia when it launched three years ago. The concept is simple, Zen Rooms guarantees minimum standards at all hotels including free WiFi, fresh towels and bedding, hot showers, etc all of which is controlled via a mobile app. Those standards are normal to most hotel stayers, but when traveling in the East, standards can vary wildly especially at budget hotels, which Zen Rooms is focused on.

For hotels, Zen Rooms manages the brand — and sometimes more — and it allows helps them tap the internet to find customers and bookings.

Today, Zen Rooms is active in six cities in Southeast Asia — it had previously also run operations in Brazil, Hong Kong and Sri Lanka — across which it claims to operate 1,000 hotel franchisees with an inventory of more than 7,000 rooms. Its rivals in Southeast Asia include Red Doorz, which raised $11 million earlier this year.

The startup has raised $8 million from investors to date, including a $4.1 million Series A last April that was led by Korea’s Redbadge Pacific and SBI Investment Korea with participation Asia Pacific Internet Group (APACIG), the joint venture fund in Asia between Rocket Internet and Qatari operator Ooredoo.

However, TechCrunch understands that a major funding deal of over $10 million fell apart in Q1 2018 which left the company with a rapidly depleting runway. As a result and as TechCrunch reported in March, the company was aggressively shopped to potential buyers, investors and rival companies in order to keep the business afloat.

Yanolja has come to the rescue but a full buy-out looks like it will be dependent on the company’s future performance, such is often the arrangement with strategic deals made with a view to full ownership. Rocket Internet, which remains a major investor in Zen Rooms, will hope that the deal goes as smoothly as Lazada, its e-commerce service that is now owned by Alibaba.

Lazada ran out of capital in similar circumstances in early 2016 and Alibaba, the Chinese internet giant, came to its aid with a $1 billion investment. Although that was a majority investment it wasn’t a full-on buyoutAlibaba later increased its holdings until it fully owned the business, and today it is a key part of the firm’s overseas expansion strategy.

Already, TechCrunch understands from one source that Zen Rooms has gone on a hiring spree in recent weeks after it closed the deal. It had earlier been forced to make cutbacks to its team as a result of cost-cutting following the collapse of the funding deal earlier in the year.

“We now have the capital to invest,” ZenRooms co-founder Kiren Tanna told TechCrunch. “The deal has been in discussion since earlier this year…. we are treating like an acquisition but this is step one.”

Tanna added that the company plans to focus on five markets in Southeast Asia, and an expansion to Vietnam may be in the pipeline soon.

Southeast Asia’s Carro raises $60M for its automotive classifieds and car financing service

Carro, an automotive classifieds service and car financing startup based in Singapore, has closed a $60 million Series B round to scale its business in Southeast Asia.

The deal was co-led by SoftBank Ventures Korea, Insignia Ventures — the firm from ex-Sequoia Asia partner Yinglan Tan — and Facebook co-founder Eduardo Saverin’s B Capital Group. Other participants include IDG Ventures India founder Manika Arora (via his family fund) and existing Carro backers Venturra,
Singtel Innov8, Golden Gate Ventures and Alpha JWC.

Carro raised a $12 million Series A round in March 2017. This latest capital takes it to $78 million from investors to date, according to Crunchbase.

The 2.5-year-old company said in an announcement that $250 million of vehicles were sold last year across its three markets: Indonesia, Thailand and Singapore. That’s more than double the $120 million it claimed in 2016. Last March, Carro introduced its Genie Finance underwriting business, and over its first year, it claims to have originated over $100 million in loans while amassing a loan book of nearly $40 million.

Carro CEO Aaron Tan previously spent time at Singtel Innov8 and is one of a trio of co-founders. Tan told TechCrunch that the capital will initially be spent growing Carro’s business in Indonesia, Thailand and Singapore, but further down the line, there’s a plan for expansion.

“The exact markets are still to be determined but it may be a small setup in Japan and other sources of cars,” he added.

Carro has already expanded in terms of services. Initially a vehicle marketplace, it launched Genie Finance and has also forayed into insurance brokerage and road-side assistance. It recently introduced a service that completes vehicle sales in 60 minutes — Carro Express — which it said is now available in 30 locations across Southeast Asia.

“We will double down on our online marketplaces and financing in emerging markets this year. Ultimately, we want to improve the experience of selling and buying a car, as well as provide access to capital to the next billion people, which will improve the quality of lives,” Tan said in a statement.

Carro is rivaled by a number of startups, including BeliMobilGue in Indonesia, Carsome, iCar Asia and Rocket Internet’s Carmudi, although with its new raise in the bank Carro is the best-funded by some margin.

iCar Asia, which is managed by Malaysian venture builder Catcha, raised $19 million last November. This year has seen Carsome — which covers Malaysia, Singapore, Indonesia and Thailand — raise a $19 million Series B, BeliMobilGue — Indonesia-only — raise $3.7 million and Carmudi land $10 million.

In the case of Carmudi, the business has retrenched itself. At its peak it covered over 20 markets worldwide across Asia, the Middle East, Africa and Latin America, but today its focus is on Indonesia, the Philippines and Sri Lanka.

Carro’s monster raise follows another notable deal in Southeast Asia today which saw Carousell close a Series C round worth $85 million. The firm added backing from new investors DBS, Southeast Asia’s largest bank, and EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Rocket Internet’s Zalora is retreating from two more countries in Asia

zalora Zalora, the Rocket Internet-backed online fashion store, is continuing its retreat from Asia. The firm sold off its businesses in Vietnam and Thailand last year, and now it is withdrawing from the Philippines and Indonesia.
Yesterday it transpired that Zalora sold 49 percent of its Philippines-based operations to local real estate firm Ayala, as E27 reported, but it is in the process of… Read More

Powered by WPeMatico