South Korea’s Yanolja invests further in Rocket Internet’s Zen Rooms

Rocket Internet’s Zen Rooms, a budget hospitality company in Southeast Asia, announced it has inked a deal with South Korean hotel booking platform Yanolja that involves an additional investment, acquisition of early investors’ stakes, and a strategic alliance.

The deal comes a year after Yanolja invested US$15 million in Zen Rooms, with the right to fully acquire the latter in the future.

Photo credit: Zen Rooms

Through the latest transaction, Zen Rooms early investor Asia Internet Holdings, a joint venture by Rocket Internet and Ooredoo Telecom, has agreed to exit its stake to Yanolja. RedBadge Pacific and SBI Korea will remain as investors, while Access Ventures will join as co-investor.

Zen Rooms’ budget hotel franchise business will also be combined with Yanolja’s scale and hospitality technologies, according to a statement. Along with this, it will be able to tap into a Yanolja investor, Booking Holdings, for support in hotel tech and sales distributions as well.

In June, Yanolja secured US$180 million from Booking Holdings and Singapore sovereign wealth fund GIC at more than US$1 billion valuation.

Yanolja and Zen Rooms are also set to work on deploying automation technology to enhance customer experience and reduce budget hotels’ operating costs.

“Since first investing in Zen, we have shared the same vision of operational excellence and customer-centricity to radically improve the Southeast Asian hospitality market. In the last 12 months, the Zen team has taken major steps to fulfill this vision and has grown exponentially while displaying top inventory quality,” said Jongyoon Kim, CEO of online business at Yanolja.

Zen Rooms, founded in 2015, is one of the largest hotel brands in the region with over 13,000 rooms under franchise. Since Yanolja’s investment last year, the company claims to have grown its revenue by 400% and become the largest hotel chain in the Philippines as of Q2 2019.

Yanolja, on the other hand, started providing accommodation information and travel content in 2005. Now, the company has become a platform that provides users with real-time travel booking services and various lodging options.

Kim said in an earlier interview that the company plans to conduct an initial public offering as early as next year.