Singapore’s Zuzu Hospitality Secures $9 Million Funding and Eyes India Expansion

May 25, 2023 | Media Coverage

Original source: Skift.com

Zuzu Hospitality Solutions, a Singapore-headquartered revenue platform provider for independent hotels, announced the completion of a $9 million Series-B round of funding.

With the support of this funding round, the travel tech startup has set ambitious goals to double its partner count with a keen focus on India.

“The $9 million funding is sufficient capital for us to support our growth for the next three years, allowing us to execute our strategies effectively and get to the scale we want,” Founder and CEO, Vikram Malhi said exclusively to Skift. 

SoftBank Ventures Asia led the funding round, with participation from Atinum Partners and existing investors Wooshin Venture Investment, Visor Ventures, and JG Digital Capital.

This is the largest funding round for the startup founded in 2016, which before this had raised a total of $6.7 million.

Ambitious Goals to Double Partner Count

The substantial financial infusion will empower Zuzu Hospitality to drive further innovation in its offerings, expedite its growth trajectory, and provide enhanced support to a greater number of independent hotels in maximizing their revenue potential, Malhi said.

The company wants to achieve an impressive milestone of 5,000 partners by the end of next year and further scale to 10,000 by 2025.

To achieve this, Malhi said the company would dedicate significant resources to expanding its operations, particularly in India, which is its newest market.

“India holds immense growth potential, and we believe that by scaling up in this market, we can establish a strong presence and capitalize on the opportunities it presents,” he said.

Additionally, the company intends to strategically invest in artificial intelligence tools to enhance pricing capabilities, automate guest management processes, and elevate the overall partner experience.

Automation is a key area where we see tremendous potential to enhance hotel operations and revenue management, Malhi said.

“We will allocate a portion of the funds to strengthen our support infrastructure and expand our customer service team. We will invest in training our staff to provide personalized assistance, timely responses to queries, and proactive guidance to our hotel partners,” Malhi went on to say.

Online Travel Market in Southeast Asia

The funding couldn’t have come at a better time for Zuzu Hospitality as the online travel market in Southeast Asia is projected to surge to an estimated worth of $44 billion by 2025.

In 2022, the online travel market in Southeast Asia amounted to approximately $17 billion. 

Moreover, the company also operates in a massive market opportunity within the hospitality industry. The travel and accommodation sector is rapidly growing and evolving, with significant untapped potential.

By targeting this market, Zuzu positions itself at the forefront of a thriving industry, attracting investors who recognize the long-term growth prospects and the vast opportunities for innovation and disruption.

Zuzu Hospitality entered India in late 2022 and is currently present in six Southeast Asian countries. These markets combined have more than 150,000 hotels.

With no immediate plans to enter new markets, Malhi said, “We will continue to grow in our existing markets.”

Attracting Funding Opportunities

Malhi, answering Skift’s question on the unique value proposition that Zuzu Hospitality offers potential investors, stated that the company’s commitment to capital efficiency ensures effective utilization of investor funds, generating strong returns on investment.

According to Malhi, another distinguishing factor for the company is the team’s expertise and strategic decision-making that have been instrumental in successfully navigating through difficult times, resulting in a stronger position.

“This experience has not only provided valuable insights but has also instilled confidence in investors, who recognize the company’s ability to overcome uncertainties and consistently deliver positive outcomes,” he said.

Amidst a challenging macroeconomic landscape that has caused a general deceleration in startup funding worldwide, including Southeast Asia, the funding is good news for Zuzu Hospitality.

“It’s a tough time to be raising funds but there is money sitting on the sideline ready to be deployed in capital-efficient businesses with strong unit economics,” said Malhi.

The company has also achieved strong unit economics, as Malhi said, “We are also on the verge of reaching earnings before interest, taxes, depreciation, and amortization break even, highlighting our focus on profitability and sustainability.”