Rocket Internet quashes Asia exit talk amid reported Zen Rooms sale bid

Photo credit: Zen Rooms

Rocket Internet has denied that it is exiting Asia after multiple layoffs and proposed sell-offs at several of its local unit’s portfolio companies.

Rumors emerged late last week that Asia Pacific Internet Group (APACIG) – Rocket’s Singapore-based joint venture with Qatari telco Ooredoo – may be shutting down following the closure of ecommerce app Lyke and the departure of several staff from hotel-booking platform Zen Rooms, both of which are APACIG-backed startups.

Zen Rooms is being offered to investors and possible acquirers, including a rival company, Tech in Asia has learned.

A source familiar with the matter told Tech in Asia that most, if not all, of APACIG’s portfolio companies have been told to accelerate cost-cutting exercises over the past couple of months and that several startups in its stable are likely to be de-funded entirely.

We contacted APACIG to confirm whether it would be closing shop – effectively marking Rocket Internet’s exit from the region – or if a restructuring process was underway that would see it de-fund some of its portfolio companies and dismiss staff.

“At this point, we can confidently say that APACIG is not closing down,” an APACIG spokesperson said in response to these queries. “As for the other questions on our portfolio companies, we will have more concrete information to share with you in the next few weeks.”

Startup consultancy Momentum Works published a blog post last Friday suggesting that APACIG had apparently “shut its doors” with “many people […] let go at different ventures, including Zen Rooms.”

No more runway?

Tech in Asia’s source said that an expected funding deal for Zen Rooms – which aggregates hotel rooms for budget-conscious travelers – had fallen through, leaving the startup in a precarious financial position.

Zenrooms’ co-founders, global managing director Nathan Boublil (L) and CEO Kiren Tanna (R) / Photo credit: Zen Rooms

A separate source who’s also familiar with the matter said that Zen Rooms’ owners have been “approaching people for a fire sale.” Those parties supposedly include Singapore-based competitor RedDoorz, which today announced a new US$11 million fundraise.

“[Zen Rooms] is out of cash, running around in circles. It seems the company might just get out of business unless it has a desperate last-minute sale,” noted the source.

We reached out to RedDoorz for a comment, but it neither confirmed nor denied that they’ve been approached.

Deeper problems than funding

Market cautious