TRAVELIO, an Indonesia-based residential property startup, has bagged US$18 million in Series B funds in a round co-led by Temasek Holdings subsidiary Pavilion Capital and venture capital (VC) firm Gobi Partners.
The startup operates a platform that allows users to book a range of fully-furnished accommodation for both short stays and longer-term housing needs. Travelio signs exclusive management contracts with property owners and developers who have unsold units or vacant investment homes. The property must be available for leasing to the public for at least 95 per cent of tenure length; on average, tenure length lasts two to five years.
Similar models in other markets include Sonder in the US and Tujia in China. Travelio operates on a revenue-sharing model with property owners.
A “very sizeable” proportion of its tenants are middle class Indonesians looking for an affordable place to stay. “At first it was supposed to be like Airbnb, but the demand from the middle class is so huge in terms of housing needs,” co-founder and chief strategy officer Christina Suriadjaja told The Business Times.
Ms Suriadjaja said there is a backlog of millions of houses for the middle class, but an oversupply of vacant apartments owned by investors.
She said: “The norm in Indonesia to buy a property mortgage is tough. Down payment is about 20 per cent and for rental, you have to pay one year in advance and a deposit for 13 months. It’s tough for people to afford, and tough liquidity for the owners.”
It was therefore natural for Travelio to extend lease options for tenants, especially since no additional resources were required because the business model was tech-based. Travelio offers flexible payment terms for tenants, from monthly to quarterly to biannually.
It has close to 5,000 exclusive management contracts signed in Jakarta, Tangerang, Bekasi, Depok, Bandung and Surabaya. It plans to enter five more cities in the first quarter of next year. Room nights booked for properties under Travelio’s management rose six to seven times year on year.
The fresh funds raised will be used to invest in marketing, talent, and development of new product verticals. New services in the pipeline for property owners include interior design and payments for utilities and maintenance. New offerings coming up for tenants include daily necessities, financing, and payments of installments and flexible payment terms.
Last year, Travelio announced it raised US$4 million in a Series A round led by Vynn Capital, a VC firm founded by former Gobi Partners vice president Victor Chua. Other investors include Singapore-based Insignia Ventures Partners, US-based Fenox Venture Capital and Indonesia-based VC firms IndoGen Capital and Stellar Kapital.