Skift Take
While the Indian IPO market is strong right now, global markets aren’t as friendly, as a result RedDoorz is taking a measured approach with its IPO plans.
Southeast Asian online hotel management and booking platform RedDoorz has its sights set on IPO – but it has a lot of steps to clear first.
While the Indian IPO market is currently thriving, the global public markets are less favorable, RedDoorz founder and CEO Amit Saberwal told Skift. “We plan to build and grow the business before setting a concrete timeline, but I hope we can achieve this within the next three years,” he said.
The company aims for at least $65 to $70 million in revenue to be in a strong position for an IPO.
While the company did not disclose its exact financials, RedDoorz was ranked 96th in the Straits Times and Statista’s 2024 list of Singapore’s top 100 fastest-growing companies, with 2022 revenues estimated at SGD 28.3 million ($20.9 million).
RedDoorz Funding
RedDoorz secured $70 million in a Series C funding round in August 2019, following a $45 million Series B round the previous month, according to the factsheet. In April this year, it raised an additional $28.2 million from some of its 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 an important role in RedDoorz’s growth strategy. “We can either build our way into revenue or buy our way into it,” Saberwal explained.
RedDoorz focuses on opportunities within the hospitality space in Southeast Asia, leveraging its technology to help asset owners increase revenue. Its core markets include Indonesia and the Philippines, with potential expansion into Thailand.
Given the subdued capital markets, Saberwal said he would avoid large, cash-burning acquisitions. Instead, the company seeks out businesses that are either breaking even or making money, and that align with its vision. “We are building the largest hospitality company in Southeast Asia. A public event is a good option to raise money, and founder alignment is essential,” the CEO noted.
Focus on Sustainable Growth
RedDoorz emphasizes sustainable growth and profitability. “We’ve fought hard to reach where we are and won’t revert to a cash-burning setup,” Saberwal asserted. The company seeks acquisitions that are break-even or near break-even, with evolved business models and some scale. “We will consider small profitable companies only if they offer something unique and valuable.”
The company has shown significant progress in its financial performance. “The last quarter of last year was our first fully cash flow-positive quarter. This year, we plan to be fully cash flow positive as a company for the full year unless a strategic decision, like an acquisition, leads to some cash burning,” 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 aligns with the company’s risk appetite and that of its investors. Currently, RedDoorz is focused on Indonesia and the Philippines. Although the company is headquartered in Singapore, it has ceased operating hotels in the Singapore market due to Covid-19. Saberwal stated that there are no current plans to resume operations there.
However, the company views Thailand as integral to its story: “The RedDoorz story would be incomplete without a Thai operation,” said Saberwal. “It will likely be through a partnership or acquisition. While talks are ongoing, nothing specific has advanced yet.”
Economic Ties and Market Recovery
RedDoorz operates at the lower end of the market, primarily focusing on domestic travel. “Recovery, though steady, hasn’t reached 2019 levels. However, we expect strong growth in the coming years,” said Saberwal.
Highlighting the close ties between hospitality businesses and economic performance, he noted that both Indonesia and the Philippines are showing steady growth. While not achieving double-digit figures, the growth consistently remains between 4-5%, he said.
India Plans?
Saberwal, who in his earlier role had helped build the hotel business for Indian online travel agency MakeMyTrip, said RedDoorz would consider entering the Indian market if it provides a favorable exit in the IPO market. “We’ll only consider it with a clear exit path, likely through acquisitions or partnerships,” he said.
Given his experience with India’s largest online travel agency, he acknowledged that he is well-acquainted with the India market, however, the focus remains on current markets unless a compelling opportunity arises.
