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Indonesia’s NIDA Rooms aims to be profitable early next year, raises US$5.6 million

One of the long term plans for NIDA Rooms is to try and franchise an entire hotel

A sleight of bad press this fall appears to be over for Indonesia’s NIDA Rooms after it announced today it has raised US$5.6 million dollars led the private investment firm Shanda Group.

The latest round brings NIDA Room’s total investment to US$11 million.

Kaneswaran Avili the CEO and Co-Founder of NIDA Rooms addressed Tech in Asia reports that Nida Rooms had not paid its employees in an interview with e27.

“The bad news came after we had closed the initial term sheet with Shanda. We were in the process of closing the investment and that news came. The process took longer than we expected and because of that there was some slight delay in paying some staff and that led to the bad press,” he said.

With the new funding, Avili says Nida Rooms will focus on customer experience, enhance technology and build algorithms to help increase revenue for hotel partners.

Nida Rooms is a hotel accomodation company that wants to help standardise the often hit-or-miss nature of budget hotel booking.

The idea is by standardising the quality of rooms under the NIDA Rooms brand, customers can feel more comfortable reserving a budget hotel room and that in-turn helps hotels fill their vacancies.

“NIDA Rooms caught our attention as they have developed a business model that enables the company to quickly build a highly scalable platform with a strong brand, by effectively addressing the needs of travelers and local hotels in the fragmented, less digitalized yet large and rapidly growing economy hotel sector in Southeast Asia,” said Robert Chiu, President of Shanda Group in a statement.

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Nida Room is similar to India’s OYO Rooms and faces more direct regional competition from Rocket Internet’s ZEN Rooms.

The startup claims to be the largest such business in Southeast Asia and has 4,000 hotel partners in Indonesia, Malaysia, the Philippines and Thailand. It also is in the final stages of launching in Singapore, according to Avili.

Nida Rooms is not planning to launch to other countries after Singapore in the near future.

Profitability

Avili said, based on Nida Room’s internal plan, the company is looking at turning into profitability early next year.

“But it depends on if we are going to expand further. Are we going to invest more to get much better penetration?” said Avili.

He added that strategies aimed at growing a stronger network or grabbing larger market-share could push back NIDA Room’s profitability timeline. He said investing in customer service is another major focus (like finding methods for simplifying the check-in experience).

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Looking forward, one major move that NIDA Rooms is planning is to franchise an entire hotel. The company is gathering data and exploring its feasibility.

NIDA Rooms is available on both iOS and Android and its rooms can also be found on online-booking platforms like Expedia or Booking.com.

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