Zen Rooms, a Singapore-based hotel network operator backed by e-commerce and online services holding company Rocket Internet and telecommunications group Ooredoo, could shut down, TechCrunch has reported.
Founded in 2015, Zen Rooms offers access to a certified group of hotels in 50 Southeast Asian cities that covers the space between expensive hotel operators and informal guesthouses. It operates in seven countries including Indonesia, the Philippines, Sri Lanka and Thailand.
The company has raised a total of $8m according to TechCrunch, including an undisclosed amount from Rocket Internet and Asia Pacific Internet Group (APACIG), the investment partnership Rocket formed with Ooredoo, at the time of Zen’s launch.
APACIG subsequently participated in a $4.1m round for the company in April 2017 that was co-led by Redbadge Pacific, part of investment firm Redbadge, and SBI Investment Korea, a subsidiary of financial services group SBI.
However, Zen Rooms has been unable to generate profits and is running out of money, according to an unnamed industry source.
The company has been in talks with prospective buyers for months, three sources with knowledge of the plans told TechCrunch, and an unspecified number of employees have reportedly already been dismissed.
Zen Rooms dismissed claims of an impending sale, founder and managing director Nathan Boublil telling TechCrunch: “We downsized in our Thai business which was our least profitable. We are reinvesting in our other much more profitable countries.”