RedDoorz will use the newly-raised debt funding to expand its product offerings and launch into new regional markets
It will use the venture debt funding to expand its product offerings and launch into new regional markets.
“Venture debt providers look for companies that have good cash flow 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,” said Amit Saberwal, founder and CEO of RedDoorz, in an official press statement.
“In just one year, our revenue has risen 12 times and with this additional funding, we aim to leverage the strength of Southeast Asia’s economies to grow RedDoorz to the next level.”
Previously, RedDoorz raised an undisclosed Pre-Series A funding from 500 Startups and Jungle Ventures. It also raised an undisclosed Series A round from International Finance Corporation, SIG and Jungle Ventures.
Founded in 2015, RedDoorz describes itself as an asset-light budget hotel chain. Saberwal said RedDoorz different from other budget hotel booking platforms, such as ZEN Rooms and HostelWorld, because of its co-branding relationships with the hotels.
“We work hard with the property to improve their service quality and implement RedDoorz brand standards. We don’t aggregate by just listing all budget hotels on our platform. We only work with over 500 properties only but work very deeply with them controlling all the room inventory which we brand and sell,” Saberwal told e27.
“Properties have access to our technology and our process is fully automated. We revenue manage our inventory exactly the way airlines do – where prices increase as demand builds up. Our customers have access to our RedCash – our loyalty program and we support our customers and partners 24/7,” he said.
“You have to look at us as a chain of hotels – except we don’t own the assets (real estate). Also unlike traditional chains, we use technology to acquire and retain customers – helping us scale rapidly,” he added.
Currently, RedDoorz said it has booked over 250,000 customers.
Still, branding or not, RedDoorz faces an uphill challenge in a climate where hotel booking platforms are racing to expand their breadth of their listings. Beyond that, short-term home rental platforms such as Airbnb are also threatening to upend the hotel market (though it is facing regulatory hurdles in countries like Singapore).
And in Indonesia, which was RedDoorz’s first launch market, another budget hotel booking startup, Tinggal, offers an identical value proposition.
In a previous interview with e27, Tinggal said that it wants to “standardise budget stay experience, and provide gold-standard experience” and will “take care of the basic expectations from a budget hotel experience: clean room, safe environment, features that are working well.”
Image Credit: RedDoorz
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