In a pre-Series A round led by Lakson Venture Capital, with the participation of Pakistan-focused Karavan VC and a syndicate of angel investors, Slamabad-headquartered hospitality startup Roomy raised $1 million. The investment was revealed earlier today at the online start-up conference 021 Disrupt.
Dr. Asad Samar, a former investment banker who previously worked with Goldman Sachs and various other firms in the United Kingdom and the United Arab Emirates, started Roomi in 2018 to shake things up in Pakistan’s hospitality market. The leadership team includes Haasin bin Zahid, who previously worked with Jovago and Abdul Rehman, a travel startup from Rocket Internet, who previously worked at Convo and Telenor.
The start-up works with unbranded hotel owners by helping them renovate their properties and then take over through their online platform to give customers rooms. Roomy takes care of the property’s management, operations, and promotions, sharing profits with the landlords.
Many would assume that something similar to Oyo is being developed by Roomy, but that’s not what it does. The assets themselves are not owned by Oyo. They are operated by hotel owners with Oyo, providing stakeholders with training and various kinds of services, including workers to make them run better.
In a conversation, Dr. Asad Samar clarified that after Roomy took over their properties, their partner landlords saw their revenue rise by 1.5 to 2.5X. It’s not just the money, however. As a consequence of this the valuation of the properties often produces many folds.
The valuation proposal is easy for travelers: assured online bookings, contactless check-in & check-out (no queuing at the front desk), uniform spaces, and branded amenities. These are the items that are normally only expected from the top-tier hotels in the country, which cost an average night between $100 and $150. Roomy rates start at about $40 a night.
Dr. Asad said in a statement, “Roomy is a fresh take on the conventional hospitality market. Our rooms are furnished with aesthetically pleasing minimalist interiors, price points targeted for the young and growing middle class of Pakistan, in-house built tech stacks for the intelligent traveler and a creative business model planned for scale.
He started Roomy with two rooms in a guest house and has now expanded the network to have five properties in four cities across Pakistan with more than 200 rooms, with a team of 100 employees. Its properties include a combination of partner buildings, pods and yurts set up by Roomy itself in Pakistan’s Northern Areas (which are known for their mountain ranges and are very popular among both local and international travelers). The properties have an average occupancy rate of 70 percent, Dr. Asad told.
Recently, four more properties have been signed up to be made available for travel over the next few weeks.
It is probably this early success of the model that helped the startup to close its round during the pandemic (which has proved to be a hell for start-ups in hospitality/travel) in almost no time.
Faisal Aftab, Lakson Venture Capital’s Managing Partner, said: “Pakistan’s hospitality and travel industry is an underserved market segment with a multi-billion-dollar market opportunity. As it has a scalable asset-light business model, Roomy is our second choice in the travel vertical; while addressing the demand gap for younger domestic leisure and corporate budget travelers, providing optimally priced standardized rooms & facilities in key locations.
To acquire more assets, expand its team, and increase its marketing budget, Roomy plans to use the investment.
