Japanese hospitality firm raises $1m in seed money

Section L, a Japanese hospitality firm, has raised US$1 million in its seed round, which saw participation from Feedback Ventures, and unnamed angel investors.

Founded in 2020, Section L operates apartment hotels using proprietary software that lets visitors conduct all transactions and interact with other guests through the app, minimizing physical interaction during the Covid-19 pandemic.

The hospitality tech firm said it reached profitability within two months of its launch, outperforming other Tokyo-based hotels by 4x in terms of occupancy. Its earnings come from a cut of profits made from managing properties for owners, as well as design, setup, and software service fees.

Section L’s management team / Photo credit: Section L

“We believe that by engaging hotel guests as members of the community, they will be able to help each other out before, during, and after their stays,” Howard Ho, co-founder and CEO of Section L, told Tech in Asia.

Section L is now looking to license its software to other property operators in Tokyo. It currently manages two apartment hotels -one in Ginza and another in Asakusa – as well as a pop-up restaurant and lounge in Shibuya.

“In the future, we will also make brokerage fees when we help owners buy/sell properties managed by us,” added Ho, noting that they have a Japan real estate license and manage a portfolio asset value of US$25 million.