“Y Combinator of Hospitality” plans $100m fund
Technekai, a global hospitality tech fund based out of Silicon Valley, has set up office in Singapore and is looking to raise $100 million of funding to invest in and accelerate hospitality tech startups in Asia Pacific.
Heading the Technekai Hospitality Tech Fund are childhood buddies from Mumbai, Manish Gupta and Sandeep Aneja, who went their separate ways to forge somewhat parallel careers in tech investments in Silicon Valley, and whose paths crossed again recently when they both recognised the opportunity in hospitality tech in APAC.
Manish Gupta (left) and Sandeep Aneja, childhood buddies from Mumbai, reunite behind mission to effect change in hospitality tech.
Manish, founder and managing partner of Technekai, has a strong background in hospitality and tech. He is founder and chairman of Shashi Group which owns and operates 10 hotels in Silicon Valley, including Shashi Hotel and several Alofts in the valley. He is also the founder of Techne Infiniti, a vertical VC fund focused on funding and scaling next generation technology startups and platforms.
Speaking to WiT in Singapore, Manish, who said Technekai wanted to be the “Y Combinator of Hospitality”, noted, “The hospitality industry is 20 years behind the times, every industry has advanced and we feel a fund is the best vehicle to effect change.
“There are at least 100 different areas that could be digitised in the next five to 10 years whether it’s overlaying AI, ML, cloud, blockchain on existing platforms, or in revenue management and distribution, and other areas.”
Sandeep, who started Kaizenvest, described as Asia’s leading education focused investment company, said, “Manish and I re-met, you could say, at the right time. The hospitality sector is getting more exciting and he wanted to build something more global, and we are both equally passionate about effecting change.”
Technekai, which is based out of Kaizenvest’s office in Singapore for now, has appointed Clarence Chong, as venture partner. Chong, formerly of Velocity Ventures, will head up regional expansion efforts.
The fund is targeting to support startups in the seed to Series A stage with amounts of between $3m and $5m each. It already has five startups in the first cohort and its goal is to get up to 30-40 companies a year.
It projects that the hospitality market is estimated to reach $6 trillion in 2026, and there is a need for smart capital. According to Technekai, “VC funding is flooding to fund solutions, growing quickly at 27% CAGR from 2018 to 2022.”
It identified five key factors driving change in the hospitality industry – democratisation of travel (long tail), multitude of accommodation options, increased personalisation, increasing labour shortages and technology-led disruptions.
The industry’s low tech adoption positions the market for outsized growth, it believes. Compared to other industries, hospitality’s average tech budget as a percentage of revenue (2020) is a mere 2.5% compared with 10.1% for banking and securities, and 7.1% for technology and telecommunications.
It sees opportunities in innovation – booking engines, AR/VR experiences, mobile ordering & f&b, and guest apps – as well as in efficiency – hotel CRM and loyalty, reputation management, energy management and controls and revenue management systems.
It is looking at two different buckets of opportunities in APAC. One is to expand globally with a local twist, ie, bringing a local startup say from Bangladesh and helping it to scale globally and the other is to take advantage of new tech opportunities in the region.
“APAC is leapfrogging ahead in some ways in digitisation – for example, some of the payment solutions here, the US is not even thinking about. We can help bring those companies to Silicon Valley for serious valuations,” said Manish.
“We want to get deeper into Asia,” added Sandeep. “We have a team to work on incoming deal flow, which is both a science and art, and we want to be the best thought leader and add value to the industry.”
