RedDoorz announced it has raised an additional US$1 million in venture debt from InnoVen Capital, a venture lending firm owned by Singapore’s Temasek Holdings and United Overseas Bank.
This is an extension of its Series A round, which it raised in 2016, led by the Asia Investment Fund of Susquehanna International Group (SIG), International Finance Corporation (IFC), the private investment arm of the World Bank Group, and Jungle Ventures. Jungle Ventures had earlier also invested in the pre-series A round along with 500 Startups in 2015.
RedDoorz was established in 2015 with the vision of creating a brand of quality budget accommodation that promises travellers a consistent experience. The company has about about 500 properties, mainly in Indonesia, with its network of hotels across Jakarta, Bali, Bandung and Surabaya.
“Venture debt providers look for companies that have well-capitalized equity investors, good cash flows and the ability to repay their debt, so I’m pleased that this partnership with InnoVen shows its confidence in the way we execute our business model. As the GDP per capita and disposable income of the local population grow, their spend on travel increases and we are helping provide quality hospitality to this growing segment of consumers,” said Amit Saberwal, founder and chief executive officer of RedDoorz.
He continued: “In the last one year, our revenue has grown 12 times while maintaining best-in-class unit economics, and with this additional funding, we aim to leverage the strength of Southeast Asia’s economies to grow RedDoorz to become the largest online budget accommodation brand in the region.”
Southeast Asia’s market size for online hotel bookings will increase from $6.6 billion in 2015 to $36.4 billion by 2025 with a 19 percent compound annual growth, according to a Google study.
“We are constantly on the lookout for companies that have a solid track record and good backing and the unit economics of RedDoorz have been impressive,” said Chin Chao, CEO of Singapore and Southeast Asia at InnoVen. “Venture debt offers a crucial complementary source of funding for startups that have reached a strong state in their development and want to avoid equity dilution.”
Jungle Ventures is one of the most active VC investors in Southeast Asia, and has incidentally also had 2 exits in the travel technology space, having exited Travelmob to HomeAway (then NASDAQ listed, acquired by Expedia) and Voyagin to Rakuten. SIG is an active investor in technology ventures across Asia and its recent investments in Southeast Asia include Zilingo, Jualo, K-Fit and Open Port. IFC’s Venture Capital group is an active investor in consumer Internet and technology startups across emerging markets globally, and especially in India, China and Southeast Asia with its Asian investments including market leaders such as Huochebang, Byju’s, Lenskart, BigBasket and Ayla Networks.
