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Southeast Asia’s budget hotel brand RedDoorz is on a roll, announcing $70 million in new funding when the ink is barely dry on the $45 million it sealed last month.
This new investment is the first close of a larger Series C round and is led by Asia Partners with participation from new investors Rakuten Capital and Mirae Asset-Naver Asia Growth Fund.
The two latest investments totaling $115 million will put RedDoorz on a more even keel to compete with heavily-funded juggernaut Oyo, which is investing $200 million in Southeast Asia, of which $100 million is in Indonesia, RedDoorz’s largest market, and $50 million in Vietnam.
RedDoorz said it will use the new funds to launch in new markets in Southeast Asia, where it currently operates only in four of the 10 markets in the region, Indonesia, Singapore, Vietnam and the Philippines. As of December 2018, RedDoorz had 680 properties and 17,000 rooms, of which 13,600 rooms were in Indonesia.
A significant portion of the latest proceeds will be used to build a second engineering hub in Vietnam to complement the current regional tech hub based out of India, it adds.
The company also plans to ramp up its hotel staff and quality training programs across all properties in its four existing markets, where it employs about 10,000 people through its hotel partners.
“RedDoorz operates in some of the most dynamic markets in the world and we see tremendous opportunities to continue growing our platform and expanding into new markets” said Amit Saberwal, founder and CEO of RedDoorz, in a statement.
“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.
Asia Partners, which led the latest round, is a Singapore-based growth equity firm. Two of its co-founders were involved in two of emerging Asia’s most notable exits, the largest IPO for a Southeast Asia startup, Sea, and the largest tech cash exit in Asia’s history — Flipkart’s sale to Wal-Mart. Its five co-founders have invested in or helped to lead 24 companies in Southeast Asia over the past decade, including Indonesia’s unicorn e-commerce player, Bukalapak.
RedDoorz is its first portfolio company; the company typically focuses on growth-stage investments in technology and technology-enabled companies in Southeast Asia.
Oliver M. Rippel and Nicholas A. Nash, co-founders and partners of Asia Partners, said in a statement: “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.”
Rakuten Capital, one of two other leading funds, is the corporate venture arm of Japanese internet services giant Rakuten Group. It has invested in regional leading companies such as Gojek, Carousell and Shopback. The Mirae Asset-Naver Asia Growth Fund, a joint venture between Seoul-based Mirae Financial Group and Internet company Naver, counts HappyFresh and BigBasket as portfolio companies and also recently participated in Grab’s US$1 billion Series H round.
Existing investors Qiming Venture Partners and International Finance Corp. also reiterated their support by participating in the round.
The new funding brings the total amount of funds raised by RedDoorz to US$140 million since its launch in 2015. RedDoorz said it is now among the best-funded startups in Singapore and, specifically, is the best-funded company in its category of online affordable accommodations across Southeast Asia.