Singapore-based Zuzu gets $2M seed to assistance tiny hotels compete with huge chains

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Source:   —  October 23, 2017, at 12:48 PM

Along with angel investments, Zuzu’s seed funding brings its total raised to $3 million. Other backers in this circular comprise Paul Brown, the chief executive officer of Arby’s Restaurant Grouping and former Hilton president of brands and commercial services, and returning investor Goodman Capital.

Singapore-based Zuzu gets $2M seed to assistance tiny hotels compete with huge chains

The Singapore-based startup announced today that it's raised seed funding of $2 million led by Wavemaker Partners, with participation from other Southeast Asian venture capital firms Golden Gate Ventures, Alpha JWC and Convergence Ventures.

Along with angel investments, Zuzu’s seed funding brings its total raised to $3 million. Other backers in this circular comprise Paul Brown, the chief executive officer of Arby’s Restaurant Grouping and former Hilton president of brands and commercial services, and returning investor Goodman Capital.

Co-founders Dan Lynn and Vikram Malhi left their jobs at major players in the online travel space to launch Zuzu latest year. Lynn was HomeAway’s vice president of APAC and emerging markets, while Malhi served as Expedia’s managing director of Asia. Expedia recently invested $350 million in Southeast Asian travel portal Traveloka at a valuation of nearly billion, underscoring the market’s potential.

Sites love that Traveloka, however, mainly target large hotel chains. As a result, Lynn says he and Malhi “could look that independent hotels, particularly smaller ones, weren't getting their objective share of demand in the market.”

“We felt love the large online travel agencies couldn't construct solutions that really helped these hotels, as number hotelier can rely on just one channel,” he adds. “At the same time, the pure hotel technology companies don’t appreciate the difficulty of using their product as a tiny hotel. So we decided to construct a software and service solution, tailored for these independent hotels.”

Other companies that target tiny hotels in the region comprise OYO and Zenrooms, which add hotels to their networks and allow management and marketing services. In return, every hotel adopts their branding, including the same signage and room decor, which is supposed to reassure guests that they’ll discover the same standard of service in every establishment. Zuzu, on the other hand, serves as a white-label solution for hotels that wish to preserve their own branding, while at the same time outsourcing bookings, marketing and income management to the company.

Zuzu claims that hotels can look a sixty percent to one hundred percent expand in online bookings after signing up for its services. Its team checks in with hotels every one to two days and helps them revamp their online marketing content, discover new distribution channels for bookings, adopt dynamic pricing strategies and gather visitor reviews through Zuzu’s site. While Zuzu offers different payment models, most of its hotels prefer income sharing because it means the startup’s goals are aligned with theirs.

Since its launch latest July, Zuzu has signed up more than one hundred fifty hotels in Taiwan, India and Thailand and plans to widen further throughout in Asia. Its current focus is on boosting income at hotels, however, rather than growing its network.

“If we aren’t meaningfully increasing income at a hotel by twenty percent to forty%, then we won’t focus on signing up more hotels until we can ensure we've delivered that,” says Lynn.

Featured Image: JW LTD/Getty Images

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