Singapore-based venture capital firm Velocity Ventures has announced the initial closing of its US$20-million fund dedicated to hospitality & travel startups in Southeast Asia.
The Velocity Hospitality and Travel Fund I has a COVID-19-themed investment mandate, focusing on supporting distressed and disrupting seed and early growth-stage startups in these industries.
The initial closing brings the fund close to 40 per cent of the targeted corpus size.
Its backers include strategic individuals investors, family offices, and other institutional capital.
The fund expects to make the final close at the end of 2021.
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Along with this, the fund has also announced its maiden investments in two startups: Aigens and Zuzu Hospitality.
Based out of Hong Kong, Aigens provides fully integrated mobile, middleware, and hardware solutions to help restaurants and hotels grow revenue, improve productivity and deliver superior customer experience. Aigens AI-powered solutions allow mobile, BYOD, online, and kiosk omnichannel ordering solutions, and integrate with over 300 POS, payment, and delivery platforms.
Headquartered in Singapore, ZUZU helps independent hotels grow their revenues by solving their revenue and distribution management challenges with a proprietary all-in-one hotel operating system. ZUZU offers resource- and time-strapped hotels the technology and expertise of larger hotel chains with none of their associated costs and restrictions.
“In such unprecedented times, we believe the pandemic will deliver a period of unparalleled innovation and opportunity in the hospitality and travel space as the industry transforms and adapts post-Covid-19. This, coupled with the adjustment to valuations driven by the extreme distress in the sector, provides an unprecedented opportunity to invest, support the industry and earn outsized returns. The success of this fundraising is a strong validation of our strategy,” said founder and Managing Partner Nicholas Cocks.
Velocity invests in early to growth-stage tech startups across the verticals of food & beverage, retail & experiences, accommodation, travel services, and transportation. The firm also runs a Corporate Partners program, which aims to create value for the hospitality & travel industry by partnering with strategic key players in the sector to pilot innovation and support the recovery through COVID-19.
Its current corporate partners include Etihad Airways (transportation – airline), Lufthansa Innovation Hub (transportation, airline), Goldbell Group (transportation, mobility), The Lo & Behold Group (F&B), RB Capital (retail and experiences), and Global Hotel Alliance (accommodation).
It also works closely with government bodies and accelerator programmes in the hospitality & travel sector in Southeast Asia to build, develop and protect the startup ecosystem. They include Singapore Tourism Board, Malaysia Digital Economy Corporation, and Plug and Play APAC.
Also Read: Lumitics raises seed funding to track the food wasted by Singapore’s F&B outlets and restaurants
Velocity Ventures has earlier backed two startups — Lumitics (food waste management) and IDEM Hospitality (cloud-based solutions to automate and reduce the complexity of group reservations).
As the COVID-19 broke out and spread rapidly in 2020, the international travel industry like aviation and hospitality suffered unprecedented damages. In some countries in Southeast Asia, which is famous for its world-class tourist destinations, tourism is the main revenue stream, and the suspension of travel activities meant lower foreign inflows, decreased employment rates, and thus, sharp economic slowdown.
Many startups operating in the travel and hospitality sector either shuttered (for example, Airy) or pivoted their product/business model (For example, Indonesia-based accommodation startup Bobobox pivoted to a capsule network). The launching of the new fund will give some relief to many startups in the industry that are looking for financial resources to put their business back on track.
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