Indonesian startup fails to pay employees and vendors just months after raising millions

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On-demand hotel startup Nida Rooms has apparently run out of money and, in some cases, not paid employees and vendors for several months.

That’s despite how it claimed to have raised US$4.2 million in April this year, on top of an earlier US$1.5 million seed round.

Multiple sources in the company confirmed to Tech in Asia that they’re owed money. Some existing staff haven’t been paid for “many months” and shared copies of internal emails from senior executives which state that the cash position is “very tight.”

Others, including vendors, claim to be owed tens of thousands of dollars in outstanding dues. There’s no word on when payments will be made, despite frantic chases for reimbursements.

One employee told Tech in Asia via email that there have been budgetary problems at the company. As a result it had to pay some vendors in installments, despite existing agreements which don’t allow for that option. The employee added that many vendors haven’t been fully paid.

Some vendors claim outstanding dues from as far back as January.

Nida Rooms’ funding round in April

Kaneswaran Avili, CEO of Nida Rooms, told Tech in Asia via a phone call that the vendor allegations were untrue and they were falsifying invoices to claim business that had never taken place.

He said it was an attempt by jealous rivals to prevent the startup from locking in another funding round.

An emailed request for comment about employee salary issues was not answered.

Nida Rooms is similar to India-based Oyo Rooms and Rocket Internet-backed Zen Rooms in that it’s trying to solve the fragmented nature of the budget hotel industry in Southeast Asia. It gives travelers uniformity of service at competitive rates. It’s currently present in Indonesia, Thailand, the Philippines, and Malaysia and claims to have over 3,100 rooms online.

Employees of Nida Rooms added that morale at the company is very low. Senior executives at the firm are apparently refusing to answer questions about salary and payment.