Korean hotel platform, Yanolja, has raised US$180 million in Series D funding led by Booking Holdings and Singapore sovereign wealth fund, GIC. The South Korea-based hotel booking website has now secured a total of $242 million in funding.
This latest round boosts Yanolja’s total valuation to over US$1 billion, granting it status as Asia’s latest travel unicorn.
This is the first time Booking Holdings has invested directly in South Korea and the two companies have also entered a strategic partnership, through which Agoda will distribute Yanolja accommodation, while Yanolja customers can book worldwide through Agoda and other Booking brands.
Founded in 2015, Yanolja began as an online search portal for Korea’s notorious “love hotels”. Yanolja claimed to be the first company to offer a reservation platform for mobile phones for these love hotels, which typically relied on walk-in customers.
Since launching, the startup has shaken off the negative stigma behind the properties, by engaging a market of budget-seeking travellers and young millennial couples instead.
The platform allowed ‘love hotels’ to expand their target customer base to budget domestic and international travellers seeking an affordable place to stay. Listings also boomed as hoteliers sought to sell rooms through Yanolja following a drop in demand resulting from South Korea’s political tension with China in 2017.
On top of its own inventory of approximately 200 Yanolja properties, it also lists hotel, pension and guesthouse rooms on its website, as well as five-star accommodation.
On a panel at WiT Seoul last April, CEO of online business and corporate strategy Kim Jong-Yoon described how the company went from a “moon shot idea to a rocket launch.”
He explained his surprise when he saw users trying to understand what the company was doing, and how the startup capitalised on that curiosity through ad campaigns that would better educate the market about its services.
“Three years ago, we were at 60% growth but many investors said it was because our costs were too low, but it is still accelerating from 60% to 100%. We thought we should scale up, so we are doing it.”
In the last two years, Yanolja claims to have doubled its revenue, processing $100 million in transactions on a monthly basis, and has so far handled 20 million bookings. Yanolja says it took in $85 million in revenue in 2017.
It now has its sights set further afield. Last year, Yanolja pumped $15 million into ZEN Rooms and Kim is not shy about declaring the company’s intent to go global.
He explained that the best item for export is Yanolja’ business model. “Considering how economies change, we can find markets that would thrive with our business model.” Said Kim, “the accommodation market is huge in South Korea and overseas, and there is enormous opportunity for change.”
According to Reuters, the startup is not yet profitable, but Yanolja is planning an IPO by 2022.
