Singapore-headquartered budget hotel chain Zen Rooms (Zen) has received additional investment of an undisclosed sum from South Korea’s travel group Yanolja.
Yanolja has also acquired Zen’s early investors’ stakes and signed a wide strategic alliance with the company.
Backed by Booking Holdings and GIC, Yanolja was the lead strategic investor in the company’s US$15 million funding round in 2018, with rights to invest further.
Zen’s early investor Asia Internet Holdings, which is a joint venture between Rocket Internet and Ooredoo Telecom, has exited its stake to Yanolja. Meanwhile, RedBadge Pacific and SBI Korea remain as investors, while Access Ventures has joined as a co-investor.
The Zen-Yanolja alliance creates “the first full service budget and mid-range hospitality group in South-east Asia”, according to Zen’s co-founder and CEO, Nathan Boublil.
It combines Zen’s budget hotel franchise business with Yanolja’s scale, hospitality technologies and the backing of OTA leader Booking Holdings, thus granting Zen “unique competitive advantages in both hotel technology and sales distribution”, the company said in a statement.
The groups will work to heavily deploy automation technology to enhance customer experience, further reduce budget hotels’ operating costs and reinvent budget hospitality across South-east Asia, it added.
Since Yanolja’s investment in mid-2018, Zen has quadrupled revenue in the past year. In 4Q2019, it became the largest hotel chain in the Philippines, with 5,500 rooms under franchise.