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MARKETS & INVESTING | Staff Reporter, Singapore

This budget accommodation franchise has become the fastest-growing in SEA

After the recently closed $4.1M Series A, this start up’s total funding went up to US$ 8M.

ZEN Rooms is a budget hotel chain of the new generation, offering superior value-for money for travelers and operational efficiency through innovations for hotel partners.

Founded in 2015 in Jakarta, ZEN Rooms has since become the fastest growing budget accommodation franchise in South East Asia, says Kiren Tanna, co-founder and Global MD of ZEN Rooms. This growth figures in ZEN Room’s total funding, closing at $4.1M in Series A, it went up to US$ 8M. ZEN Rooms is backed by German conglomerate Rocket Internet, telecom group Ooredoo and SBI Investments Korea.

Tanna founded ZEN Rooms with Nathan Boublil, who, among other notable achievements, previously co-founded a data technology company in Cambridge in the UK, developing data/analytics solutions for local governments - gathering the backing of Microsoft Ventures and Cambridge University. Boublil and his team won many entrepreneurial awards in the UK including Entrepreneur of the Year at Cambridge in 2013. Tanna himself is a veteran of the Internet startup space in South East Asia, and was prior to ZEN Rooms founder & CEO of Rocket Internet-backed, starting the company from scratch in 2012 and growing it to the biggest food delivery company in Asia and the most recognizable brand in the space. After FoodPanda, Tanna was the CEO of Rocket Internet in South East Asia through APACIG, their investment joint venture with Indosat-Ooredoo. Tanna is also active on the startup scene in South East Asia as mentor and investor.

Tanna shares that ZEN Rooms’ breakthrough model was launched to disrupt budget hotel industry in the region, historically suffering from poor value-for-money and low operational efficiency. "Indeed, the market has been divided between thousands of no-name unreliable guest houses on one side and overpriced hotel chains on the other, with low operational innovation. The traditional hotel industry has hardly changed its face for the past decades," Tanna says. In addition, Tanna notes that every ZEN Rooms guest is guaranteed cleanliness, free fast Wi-Fi, comfortable double bed, working AC, a hot shower and 24/7 customer support. ZEN Rooms are now available in 7 countries in South-East Asia (Indonesia, Singapore, Thailand, Malaysia, Philippines, Sri Lanka and Hong Kong).

Their latest industry-changing innovation includes a Pay-at-hotel feature, a first in the hospitality industry in Asia as ZEN Rooms is the 1st budget franchise to offer a 100% card-free booking. Tanna notes that this is a key move to further democratize travel in a context where the majority of the SEA population is un-banked today. They are confident that this innovation will do to hotel sector what Cash on Delivery did to eCommerce adoption.

"These days it doesn’t make any sense to pay for a hotel room more than for flight tickets. Our mission is to democratize accommodation market the way budget airlines disrupted transportation," notes Tanna.

In terms of expansion, they’re looking to grow beyond their current markets, with countries such as Vietnam, Laos and Myanmar among their potential new outposts.

“In the meantime, we are also significantly increasing room inventory by getting control of all rooms for our top performing partners,” he says. “All these initiatives are expected to contribute to entering the top three budget hotel players in our key markets and raise a Series B around the end of this year.”

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