Hospitality startup Bobobox swims against the tide, secures funding

Indonesian hospitality startup BoboBox has secured US$11.5 million in a series A round led by Horizons Ventures and Alpha JWC Ventures.

Other new and existing backers such as Kakao Investments, Sequoia Surge, and Mallorca Investments also participated in the round, according to a statement.

Bobobox provides affordable hotel accommodation in the form of modular capsules. They are fitted with applications and internet-of-things systems to improve security, comfort, and affordability.

With the fresh funding, the three-year-old startup plans to accelerate its product improvement by growing its tech team and strengthening its manufacturing and operating models.

It also plans to extend its business to new markets in Southeast Asia once the world recovers from the pandemic.

Bobobox said that it has added six new locations in three cities since its funding round last year, bringing its total operating buildings to eight, with over 500 pods. It also has four new locations in three cities ready to launch, subject to Covid-19 circumstances.

“We are always on the move to secure more locations to serve the market better. However, in the meantime, we will focus on new features and protocols to address Covid-19 situations,” said Bobobox co-founder and president Antonius Bong.

Bobobox said that it has kept its occupancy rate at around 50% and 60% even with the pandemic hitting the tourism industry hard. While it has fallen compared to its pre-pandemic rate of around 80% to 90%, the company said it has been doing relatively well compared to other accommodation players, with local users becoming its new regulars.

“Our lean operating model also allows us to maintain a low burn rate, so we have a longer, sturdier runway ahead, compared to traditional accommodation players,” said Indra Gunawan, co-founder and CEO of Bobobox.