Bandung, 22 May 2020 — Bandung-based accommodation startup Bobobox raised USD 11.5 million in its Series A funding led by Horizons Ventures and Alpha JWC Ventures. New and existing investors including Kakao Investments, Sequoia Surge and Mallorca Investments also participated in the round.
Bobobox is an innovative hi-tech capsule network with a vision to be the world’s best recharging facilities for everyone to get a quality rest. Founded in 2017, the company aims to be a game changer in Indonesia’s hospitality industry. Its capsule rooms, or ‘Pods’, are equipped with app-controlled secured door access, customizable lights, Bluetooth speakers, comfortable king-size and single-size beds, compact working space, and personal air conditioners — all at affordable prices starting from USD 10 per night. With their business model and product features, Bobobox tackles space, security, comfort and affordability that occur in regular budget accommodation.
Since its last funding announcement last year, Bobobox has added 6 new locations in three cities: Bandung, Jakarta, and Semarang. The company currently operates eight buildings with more than 500 pods in total, and an average occupancy rate of 80-90% pre-Covid-19. Even with the pandemic hitting the travel industry hard, Bobobox is still doing relatively well compared to other accommodation players: its occupancy rate in March dropped to 50-60% whilst other hotels were already at single digit and many had shut down. Bobobox also has four new locations in three cities ready to launch subject to Covid-19 circumstances.
“Despite the turbulence due to the pandemic, we are grateful that we can still lock in investment from global investors. Our discipline to maintain strong unit economics across all branches is what makes it an attractive investment opportunity. 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,” says Bobobox Co-founder & CEO Indra Gunawan. “Even with the unprecedented circumstances, we have managed to adapt quickly while not abandoning improvement plans for the future.”
The pandemic also opens new opportunities to Bobobox. While the tourism industry slows down, local users become new regulars of the pods. To cater to the demand while keeping both its team and customers safe, Bobobox has applied extra preventive measures, including limiting numbers of guests and closing common areas. The company has also applied a no change and cancellation fees policy to maintain customers’ trust in the brand.
“Our standardized, clean, and affordable pods allow our guests to stay for a longer period of time across various locations. With extended preventive measures in place, many locals have relocated to our pods to improve their work-from-home experience. Some would choose a Bobobox pod closest to their workplace to avoid long commutes to work, thus limiting their exposure to crowded public facilities,” says Bobobox Co-founder & President Antonius Bong. “Covid-19 has also allowed us to show more use cases of our sleeping pods. With little modifications, we have installed more than 100 pods in hospitals as comfortable shelters for doctors and health workers so they can rest better while remaining close to their patients. We have been getting great feedback from the medics and local governments on these facilities.”
Bobobox’s regular features of contactless staying experience and thoroughly disinfected facilities is highly likely to become a new trend in traveling post Covid-19. Sanitizing and maintaining high hygiene standards in each pod are more feasible compared to conventional hotel rooms with bigger area size, making Bobobox’s pods a safer choice for travelers.
“I think another factor behind investors’ trust in us is the fact that our unique selling proposition allows us to focus on what really matters for our guests and it made us ready to welcome behavioral changes due to this pandemic, even before we knew it would happen. We are fortunate to also have the first mover advantage when tech-enabled accommodation becomes the new trend,” Indra adds.
With the fresh Series A funding, Bobobox aims to accelerate its product improvement and location expansion. The company wants to enhance the pods’ features and overall experience by growing its tech team and strengthening its manufacturing and operating models. Indra and Antonius also have penciled plans to penetrate new markets in Southeast Asia after the pandemic is over.
“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, such as contactless and seamless check-in / check-out process, as well as rigorous hygiene standards. We are also developing new and exciting value-added products and services that will complement our guests’ staying experience while providing the business with additional revenue streams to further strengthen its unit economics,” Antonius adds.
“We want to be the best player in the below-$15-accommodation class, and we know that we cannot do this alone. We are open for partnership opportunities with small property owners, investors, large-scale property developers and local government to speed up our expansion plans. While things might seem a little blurry right now, we will soon realize that travel is inevitable, and the industry will bounce back.”
“We’re thrilled to partner up with Indra, Antonius, and the rest of the Bobobox team as they continue to reimagine the concept of travel and hospitality for millions of Indonesians and international tourists alike,” says Frances Kang of Horizons Ventures. “Covid-19 has forever changed travel and hospitality as we know it. With more and more travelers prizing safety, affordability, and convenience above all else, we believe that Bobobox will be the one to set the standard for the industry.”
“Crisis, like this pandemic, reveals whether a company has strong fundamentals and a solid business model. It also separates the great among the good. With a steady performance we have seen since we first invested in Bobobox back in 2018, we are confident Bobobox not only can weather this storm, but also strive to become the region’s industry leader. We are excited to further our partnership with the company and bring more value-add to the team and business,” says Chandra Tjan, Managing Partner at Alpha JWC Ventures.