Singapore-based startup ZUZU Hospitality Solutions – a platform where small, independent hotels can list their rooms – today announced it raised US$2 million in its recently closed seed round, adding to the US$1 million it had previously secured from angel investors.
The round was led by US-Singaporean firm Wavemaker Partners, which launched its third Southeast Asia fund earlier this month.
Singapore’s Golden Gate Ventures also participated, along with Alpha JWC and Convergence Partners from Indonesia. Paul Brown, CEO at US restaurant chain Arby’s and a former senior executive at Hilton and Expedia joined in. Singaporean early-stage fund Goodman Capital followed on from its earlier investment in the startup.
The opportunity in front of us is big.
ZUZU was founded by Vikram Malhi and Dan Lynn – two former employees of internet travel portal Expedia – launched last year. With over 20 years’ experience between them working at the coalface of the online travel industry, Malhi and Lynn believed that they had identified a gap in the market.
As with larger chains, small hotel operators need to get their rooms listed on aggregator and price comparison sites – like Expedia.com, Hotels.com, and Priceline-owned Bookings.com – where travelers compare, book, and pay for hotel rooms.
ZUZU provides a platform for this purpose, working as a “virtual brand.” In this way, independent hotels can list their rooms on Zuzuhotels.com and market themselves under the ZUZU brand.
But Malhi and Lynn felt that these smaller players were in need of something more. ZUZU doesn’t just help consumers find good deals with independent hotels. It also acts as a consultancy, helping those hotels manage their operations and market themselves more effectively by offering services in things like bookkeeping, online distribution, and revenue management.
In line with this, ZUZU operates on an account-based model, aiming to work as an outsourced sales, distribution, and revenue team for their hotel partners. It doesn’t charge an upfront fee, instead making money from variable, performance-related payments.
ZUZU faces a struggle in ensuring it stands out in the increasingly crowded short-term rentals space.
The startup claims that the hotels it works with experience a 60 to 100 percent increase in online bookings after signing up. Malhi said in a statement that it has partnered with more than 150 hotels across Asia; based on the ZUZU Hotels site, these appear to be based in India, Taiwan, and Thailand.
ZUZU faces a struggle in ensuring it stands out in the increasingly crowded short-term rentals space. It is not the only player to have sought differentiation by pursuing a business-facing model. Singapore’s RedDoorz has also focused on SaaS as well as providing a booking portal for consumers, while Indonesia’s Tinggal recently decided to shutter its listings business altogether and bet its future on providing hotel management software. Others have diversified in a different direction; Airy Rooms, another Indonesian budget bookings site, has begun offering airplane tickets.
The startup said in a statement that its newly secured seed funding will be invested in further development of its “proprietary technology platform – specifically its revenue management technology” and its account management capabilities. “The opportunity in front of us is big,” said Malhi. “Now it’s time to grow.”
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