RedDoorz Considers IPO to Build Southeast Asia’s Largest Hotel Company

Take Skift

While the Indian IPO market is currently strong, the global market is not as supportive, which is why RedDoorz is taking a cautious approach to its IPO plans.

Peden Doma Bhutia

Southeast Asia-based online hotel management and booking platform RedDoorz is set to go public – but it must overcome a number of challenges first.

While the Indian IPO market is currently booming, global public markets are less supportive, RedDoorz founder and CEO Amit Saberwal told Skift. “We plan to build and scale the business before we set a specific timeline, but I hope we can achieve that in the next three years,” he said.

The company plans to generate revenue of at least $65 million to $70 million, which would put it in a strong position ahead of its initial public offering.

While the company did not disclose exact financial figures, RedDoorz was ranked 96th on the Straits Times and Statista list of Singapore’s 100 fastest-growing companies for 2024, with revenues estimated at S$28.3 million ($20.9 million) in 2022.

RedDoorz Financing

RedDoorz raised $70 million in a Series C funding round in August 2019, following a $45 million Series B round the previous month, according to a fact sheet. In April this year, it raised an additional $28.2 million from some returning investors, according to media reports.

Investors include Rakuten Capital, DeepSky Capital, Hendale Capital, Qiming Venture Partners, Asia Partners, MNC Group, Innoven Capital, Jungle Ventures and others.

Acquisitions play a major role in RedDoorz’s growth strategy. “We can build our way to revenue or buy it,” Saberwal explained.

RedDoorz focuses on opportunities in the Southeast Asian hospitality industry, using its technology to help asset owners increase revenue. Its primary markets include Indonesia and the Philippines, with potential expansion into Thailand.

Given the subdued capital markets, Saberwal said he would avoid large, cash-guzzling acquisitions. Instead, the company is looking for businesses that either break even or make money and that align with its vision. “We are building the largest hospitality company in Southeast Asia. A public event is a good way to raise money, and founder alignment is essential,” the CEO noted.

Focus on sustainable growth

RedDoorz emphasizes sustainable growth and profitability. “We fought hard to get to where we are, and we won’t go back to burning cash,” Saberwal said. The company is looking for acquisitions that are at or near breakeven, with established business models and some scale. “We’ll only consider small, profitable companies if they offer something unique and valuable.”

The company has shown significant progress in its financial performance. “The final quarter of last year was our first fully positive cash flow quarter. This year, we plan to be fully cash flow positive as a company for the full year, unless a strategic decision, such as an acquisition, leads to a cash burn,” he said.

Market expansion strategy

According to Saberwal, RedDoorz prefers to enter new markets through partnerships or acquisitions rather than starting from scratch. This approach is in line with the risk appetite of the company and its investors. RedDoorz is currently focused on Indonesia and the Philippines. Although the company is headquartered in Singapore, it has stopped operating hotels in the Singapore market due to Covid-19. Saberwal said there are no current plans to resume operations in the country.

But the company sees Thailand as an integral part of its story: “The RedDoorz story would be incomplete without the Thailand operations,” Saberwal said. “It will likely happen through a partnership or acquisition. While talks are ongoing, nothing concrete has happened yet.”

Economic ties and market reconstruction

RedDoorz operates at the lower end of the market, focusing mainly on domestic travel. “The recovery, while steady, has not reached 2019 levels. However, we expect strong growth in the coming years,” Saberwal said.

Underscoring the close links between the hotel business and economic performance, he noted that both Indonesia and the Philippines have shown steady growth. While not reaching double digits, growth has been consistently at 4-5%, he said.

India’s Plans?

Saberwal, who in his previous role helped build the hotel business for Indian online travel agency MakeMyTrip, said RedDoorz would consider entering the Indian market if it provided a good exit in the IPO market. “We will only consider it with a clear exit path, probably through acquisitions or partnerships,” he said.

Given his experience at India’s largest online travel agency, he said he is well-versed in the Indian market. However, he plans to focus on current markets unless an interesting opportunity arises.