Softbank to acquire stake in South Korean travel startup Yanolja – Skift
Yanolja may soon receive the hottest approval a startup can get. SoftBank Group’s Vision Fund wants to take a 10% stake in the South Korea-based travel company, according to a report.
The world’s largest venture capital fund is set to announce an investment of around $ 800 million in the start-up, the The Seoul Economic Daily reported, citing investment banking sources.
The companies declined to answer Skift’s questions earlier this week about rumors of funding talks.
It’s unclear what valuation the investment might give to Yanolja, who is an online travel agency, hotel technology provider and hotel operator. The company had a $ 1 billion valuation in 2019 when Booking Holdings and Singapore sovereign wealth fund GIC participated in a $ 180 million fundraiser and collectively took an approximate 35-40% stake in Yanolja. .
Until recently, Yanolja was preparing to go public and had engaged Mirae Asset Daewoo and Samsung Securities as underwriters. Yet while the startup is profitable and generated $ 10.6 billion (11 trillion Korean won) in global business-to-business transactions in 2020, the pandemic has held back its growth.
Delaying an initial public offering (IPO) in the United States until, say, 2023 could allow the startup to present investors with more solid post-pandemic numbers and lead to a more robust IPO. In March, Vision Fund successfully completed one of its portfolio investments in South Korea, Coupang e-commerce business, beginnings in an IPO in the United States.
In May, Softbank Vision Fund offered to take a $ 2 billion stake in Yanolja by repurchasing the shares of Booking Holdings and GIC, the The Korea Economic Daily reported. It is not known whether Booking Holdings and GIC have since resisted the sale of their stakes or whether this report was in error.
Softbank’s 10 percent stake, if it materializes as expected this month, would come as the Vision Fund soars again. The approximately $ 100 billion investment vehicle was valued at approximately 30% “internal rate of return” for its external shareholders since 2017 and earlier this year, he said. Softbank raised a $ 30 billion suite.
Still, Softbank’s “go-big-or-go-home” approach has had a mixed record and caused a few hiccups along the way, such as with its investment in WeWork which was not made public as expected. One of its portfolio companies, the hotel conglomerate Oyo, said on Wednesday it would retreat after geographic over-expansion ahead of the pandemic.
Yanolja’s surprise hotel tech appeal
Yanolja also appears to be levitating, despite the pandemic. He said this month he would hire 300 tech workers over the next six months, suggesting he has the capital to hire aggressively. It was also launched in South Korea $ 22 million summer marketing blitz who has a “travel technology” theme.
Yanolja is a multi-tool like a Swiss army knife. It started in 2005 as a budget hotel referral service, but has grown into a full-fledged online travel agency. It branched out into offering different categories, such as ticketing for attractions, rail ticketing, spa passes, and restaurant reservations. Separately, he manages a few hotel brands and has an investment in the Zen Rooms hotel brand.
Yet what Softbank probably loves the most about Yanolja is the startup’s proposition to become a software service provider for hoteliers around the world.
Yanolja provides cloud-based hotel management solutions to over 30,000 customers worldwide. A capital injection would accelerate the development by Yanolja of its platform of hotels, leisure and restaurants around the world. One of its offerings is a cloud-based hotel property management system that promises to be more cost effective than existing systems.
In May, Yanolja CEO Sujin Lee signed an agreement with Citibank Korea to use Citibank’s global connections to expand these services. It plans to “expand licensing agreements and countries through strategic business alliances with Citibank” and make Citibank payment services more easily accessible to the hospitality industry.
The travel disruption linked to the pandemic has exposed many hotel companies as having old-fashioned processes. Digitization is overdue.
Savvier’s hotel companies will add more software to their methods to reduce labor and distribution costs. This trend means that technology providers like Yanolja, Oracle Hospitality, Cloudbeds, SiteMinder, RateGain, Amadeus, Saber, Protel, and Mews have plenty of room to grow.
Taking a one-stop-shop approach to hospitality technology is key to Yanolja’s business-to-business strategy. See Skift’s previous analysis on Yanolja.
Upcoming mergers and acquisitions
An investment from Softbank would allow Yanolja to do more mergers and acquisitions, such as its December acquisition of Triple, a travel data services company.
If Yanolja is to make an initial public offering in the United States instead of South Korea, it will need more mergers and acquisitions outside of Asia to bolster its claim to have a global scale.
Photo Credit: Hotel The Artist Yeonsinnae is a property in Seoul that can be booked through the Yanolja Travel App. Source: Yanolja The Artist Yeonsinnae Hotel