Malaysia-based NIDA Rooms has completed its Series A financing with new investment of US$5.6 million.

The round was led by global private investment firm Shanda Group, headquartered in Singapore, and other Southeast Asian investors.

This brings the total raised by NIDA Rooms to over US$11 million, which the company said in a statement, makes “it the best-capitalised business in Southeast Asia in its segment”.

Kaneswaran Avili: Next stop Singapore?

Established in 2015 NIDA Rooms claims to be the first and largest “Virtual Hotel Operator” (VHO) in Southeast Asia.

In an interview with WIT last year NIDA Rooms CEO & co-founder, Kaneswaran Avili, said the company focuses on small hotels (60-80 rooms) that are individually branded – “but good hotels” providing six key items – clean rooms, comfortable beds, air-conditioned rooms, WiFi and functional amenities

He pointed out the budget hotel platform was not modelled after Oyo Rooms, the successful Indian aggregator for standardised inexpensive hotel rooms.

“Oyo is an ecommerce model, it prepays for the rooms and subsidies the consumers. We don’t do that.”

Since its establishment NIDA Rooms has partnered with 4,000 budget hotels in Malaysia, Indonesia, Thailand the Philippines. It also integrates its marketing activities with OTAs worldwide.

The company is eyeing Singapore for its next launch.

Kaneswaren said the company would use the new funds to strengthen its partner network and technology systems.

“We are pleased to have Shanda’s support given their track record of building strong digital businesses. Their expertise will help further our mission of becoming a regional leader in the economy accommodation industry.”

A NIDA Rooms branded hotel

NIDA Rooms Robert Chiu, president of Shanda Group, cited NIDA Rooms’ business model as reason for investing in the company.

“They have developed a business model that enables the company to quickly build a highly scalable platform with a strong brand by effectively addressing the needs of travellers and local hotels in the fragmented, less digitalised yet large and rapidly growing economy hotel sector in Southeast Asia.”

• All images credit: NIDA Rooms