Pakistan’s Roomy raises $1 million for its tech-enabled mid-tier hotel network

Islamabad-headquartered hospitality startup Roomy has raised $1 million in a pre-Series A round led by Lakson Venture Capital with the participation of Pakistan-focused Karavan VC and a syndicate of angel investors. The investment was announced at an online startup conference 021 Disrupt earlier today.

Roomy was started in 2018 by Dr. Asad Samar, a former investment banker who previously worked with Goldman Sachs and different other firms in the United Kingdom and the United Arab Emirates, to shake things up in the hospitality sector of Pakistan. The leadership team includes Haasin bin Zahid who was previously with Rocket Internet’s travel startup Jovago and Abdul Rehman who previously worked at Convo and Telenor.

The startup partners with unbranded hotel owners by helping them renovate their properties and then take them over to offer rooms to customers through its online platform. Roomy takes care of management, operations, and marketing of the property, sharing revenue with the landlords.

Many would think that Roomy is building something similar to Oyo but that’s not what it’s doing. Oyo does not manage the properties itself. They’re managed by the hotel owners with Oyo offering training and different types of resources for the stakeholders including to staff to help them run better.

Dr. Asad Samar, in a conversation with MENAbytes explained that their partner landlords have seen their income grow by 1.5 to 2.5X after Roomy taking over their properties. But it’s not just the income. The value of the properties also grows several folds as a result of this.

For travelers, the valuation proposition is simple: guaranteed online bookings, contactless check-in & check-out (no front desk queuing), standardized rooms, and branded amenities. These are the things that are usually expected from the top-tier hotels in the country only which cost between $100 to $150 on average for a night. Roomy’s prices start from about $40 per night.

In a statement, Dr. Asad said, “Roomy is a fresh take on the traditional hospitality business. Our rooms are decked out with aesthetically pleasing minimalist interiors, price points tailored for the young and growing Pakistani middle class, tech-stack developed in-house for the smart traveler and an innovative business model designed for scale.”

He had started Roomy with two rooms in a guest house and has now grown the network to have 5 properties with over 200 rooms in four cities across Pakistan, with a team of 100 employees. Its properties include a mix of partner buildings and, pods and yurts set up by Roomy itself in the Northern Areas of Pakistan (which are known for their mountain ranges and are very popular among both local and international travelers). The properties, Dr. Asad has told MENAbytes, have an average occupancy rate of 70 percent.

They’ve recently signed up four more properties that will be made available for the travels within the next few weeks.

It is probably this early success of the model because of which the startup was able to close its round in almost no time during the pandemic (which has proven to be a hell for hospitality/travel startups).

Faisal Aftab, the Managing Partner of Lakson Venture Capital, said, “The hospitality and travel industry in Pakistan is an underserviced market segment with a multi-billion-dollar market opportunity. Roomy is our second pick in the travel vertical as it has a scalable asset-light business model; while addressing the market gap for younger domestic leisure and corporate budget travelers, offering optimally priced standardized rooms & amenities in key locations.”

Roomy plans to use the investment to acquire more properties, grow its team, and increase its marketing spend.