RedDoorz Obtains Further Investment for Indonesian Market
Will add 9 new cities and claim towards profitability in Q3 2018
RedDoorz, the budget hotel's online booking platform, said to have received further investment to expand its market in Indonesia. However, it is not directly revealed, either from which VC and the amount they’re getting.
In yesterday’s media meeting (11/15), RedDoorz's Founder and CEO, Amit Saberwal, said that they’re ready to allocate more than $10 million (approximately 130 billion Rupiah) to develop Indonesia market until the end of next year.
The funds will be used to recruit new talents, training costs, standardize services, and improve room quality. Moreover, RedDoorz will add nine new cities in Indonesia for business expansion.
Per interview with DailySocial, Saberwal said that they confirmed the allocation fund came from an unannounced fundraising.
"It is true, as a RedDoorz policy not to announce our funding rounds derived from VC. Please understand. We only announce a one-time venture debt of $1 million," he said.
He continued, this funding round comes from a venture capital. Previously, the company also received investment commitments that were not publicly announced from SIG (Susquehanna International Group), Jungle, and IFC. According to Saberwal, the three investors showed their commitment to continue supporting the company.
Funding received by the company and publicly announced was a $1 million debt financing from InnoVen Capital in April 2017. Some others RedDoorz investors are 500 Startups and IFC.
Developing the Lead Market
Indonesia is RedDoorz's leading market and stands as company's focus on providing the best service. Beside Indonesia, RedDoorz is also exist in Singapore and will open a new operation in the Philippines shortly. Singapore becomes RedDoorz's headquarters, while India becomes technological development center.
In Indonesia, the company has partnered with 450 property owners with more than 3 thousand rooms spread across seven cities in Indonesia. RedDoorz claims to have served about 500 thousand users in Indonesia with reorder rate of 65%.
It means everyone is using RedDoorz service five times a year on average. RedDoorz application has been downloaded more than 500 thousand times.
To increase RedDoorz's market penetration in Indonesia, the company will expand to nine new cities next year. The cities to be targeted are Aceh, Balikpapan, Lombok, Makassar, Manado, Medan, and Solo.
The company will continue to expand its presence in existing seven cities. Those cities are Jakarta, Bogor, Bandung, Semarang, Yogyakarta, Surabaya, and Bali.
The selection of this new city, for Saberwal, is not without reason. They review the entire city, although not a big one but the most-visited.
"We believe that the right team, the right investors, and the right market opportunity have played a key role for our success in Indonesia. Our Indonesian team is a good combination of talents who have extensive and thrive experience in startup dynamics of the country. "
In fact, Saberwal optimistic with all these strategies they can generate profitability in the third quarter of 2018. Currently RedDoorz's coverage of total budget hotel industry in Indonesia only reached 0.16%.
RedDoorz COO Rishabh Singhi added that Indonesian market has proved to be a great start for RedDoorz. The company has worked closely with middle-class budget hotels, private properties, and lodges to innovate, collaborate, and focus on creating an unique experience.
"We are actively seeking to reach more than 100 million digital consumers. Through our platform, the hotel can target specific markets and ensure the sustainability of good occupancy levels," said Singhi.
They believe this industry is a great opportunity in Southeast Asia that can continue to be developed. The fact is, compared with India alone, the potential in Southeast Asia has reached three times larger worth of $20 billion.
RedDoorz was first established in Indonesia on July 2015. Last year, RedDoorz's business grew 11 times larger, while expected to grow 5-fold this year. For the next five years, the company's growth is targeted to remain stable in the range of 4-5 times.
In marketing its service, RedDoorz partnered with other OTA service providers. Some of them including Agoda, Booking, Expedia, MG, Airbnb, Goibibo, Pegipegi, Ctrip, and Hotels.
- Original article is written in Indonesian, translated by Kristin Siagian