RedDoorz is raising $50m to defend its turf against Oyo

A RedDoorz-branded hotel room / Photo credit: RedDoorz

Singapore-based standardized accommodation startup RedDoorz is raising a series B round of up to US$50 million, which will be led by Chinese VC firm Qiming Venture Partners, a source familiar with the deal tells Tech in Asia. If the target amount is raised, the deal will bring the hotel chain’s total amount of funding to roughly US$70 million.

The funds will be used to enhance RedDoorz’s technology and brand, the person says. Part of this is increasing its tech product team and working on “deeper features” like its AI-based pricing algorithm. According to the source, while RedDoorz is already working on their technology and branding, it is still “a long way to go” before perfecting them.

Part of the money will also be used for expansion in the future, the source notes. Malaysia and Thailand are particularly interesting markets for RedDoorz, but the person thinks that it isn’t looking to expand in 2019.

RedDoorz operates in the standardized accommodation space, which involves buying room inventory from budget hotels and refurbishing them to offer a standardized service. They then offer these rooms online for customers to book. Competitors include the likes of Singapore-based Zen Rooms, Indonesia-based Airy Rooms, and India-based Oyo Rooms.

Launched in 2015, RedDoorz has refurbished 21,000 rooms across 40 cities in countries like Indonesia, the Philippines, Singapore, and Vietnam. Its goal is to more than double this number to 45,000 rooms by the end of 2019. 

The cash infusion comes as Softbank-backed Oyo Rooms continues to aggressively expand in Southeast Asia. To date, the startup has raised US$1.7 billion, and it said in October 2018 that it would pump US$200 million to win the region.