BKNG Stock – What Yanolja intends to do with its new $1.7b funding
No plans for consumer superapp outside South Korea, focus is on building next-gen travel platform “beyond OTA”, says CEO Jongyoon Kim
WHEN news broke of SoftBank Vision Fund’s US$1.7b investment in Yanolja last week, staff of the South Korean travel unicorn were working from home due to tightened restrictions in Seoul, thus there was no big party to celebrate in the office but internal work chats erupted in joy.
nobody in the building,” said CEO of Yanolja and Yanolja Cloud, Kim Jongyoon,
“so we could not feel the celebration in person. But on Slack and internal
chats, many employees expressed their happiness. They know they can expect
growth from now on.
announced the reason for the investment – that we were building a global tech
platform and it was the global expansion plans that excited many employees.
Everyone wants to go outside Korea.”
announced to staff that Yanolja would add 300 more people to the tech team in
South Korea, set up another R&D centre in Asia, in addition to the two it
has in Vietnam and India, and recruit another 100 people in the region.
Currently, of the 1,600 staff, 40% are in tech. Within the next couple of
years, Jongyoon expects the ratio to go to 70% as Yanolja ramps up its tech.
news was also celebrated by industry peers – Jongyoon said he received hundreds
of messages from trade colleagues. “They see it as a big motivation for the industry, that investors
such as Softbank believe in the future despite the difficult times we are going
SoftBank was excited by Yanolja’s vision to build what he says will be the
next-level travel platform “beyond an OTA”. “We do not want to be an OTA, there
is no added value to the industry. To add value, we want to build a platform
that will transform the travel and hospitality industry.”
From love hotels to meta platform, using Amazon as model
understand what Yanolja is trying to do, you have to go back in time. The
company started about 17 years ago as an aggregator of “love hotels” – small
part-time accommodation – branching out into other hotel content.
who previously worked at Google and McKinsey, joined the company six years ago
to launch “Yanolja Restart” to reinvent the business. He likes to use his
“runner and car maker” analogy. “Seventeen years ago, we competed with other
runners as a runner. Six years ago, looking at the trend, we realised there
would be big innovation and transformation of the travel and hospitality
industry. We decided to give up all existing assets and redefined the business
model. We became a car maker so we don’t have to compete with runners. As a car
maker, all you have to do is build a good car.”
It set its
eye on the Amazon model. “What we want to do is integrate B2C, B2B and
online-offline data to build a meta platform similar to Amazon,” said Jongyoon.
“The difference is Amazon is tangible product, Yanolja is intangible service.
With ecommerce, you send product through logistics, with travel, people have to
leave their home to consume the product. The idea of the platform is the same
but the technology is totally different.
look at the ecommerce market in Korea, there are two main players, Coupang and
eBay. Both have similar transaction volumes but Coupang’s valuation is 20x
bigger than eBay. The market recognises that the agency model cannot survive,
you have to become a meta platform.”
work on building a consumer travel superapp in South Korea. It aggregated
small, independent hotels (beyond love hotels), then broadened and deepened its
hotel content and in the last 18 months, amid Covid, it intensified the
building out of its supply chain which now includes leisure activities,
tickets, restaurants and transportation including trains and buses.
already working on incorporating all these travel-related categories. Covid
gave us the time to do it even faster. We want to have end-to-end data
integration across the value chain,” said Jongyoon.
it developed Yanolja Cloud to supply B2B solutions to the South Korean travel
industry. In addition to building out its hospitality tech, it developed
solutions for leisure activities and facilities, property management solutions
for residences and acquired NowWaiting, a restaurant reservation/waiting list
been preparing to do all this before Covid. The good thing is, during Covid, we
saw big growth from these businesses when the hotel business was down,” he
too, funding flowed in. When it launched Yanolja Restart six years ago, it
received US$10m funding. Series B was $20m, Series C was $60m and Series D,
$200m. Series E, well, that’s the US$1.7b from SoftBank Vision Group, ahead of
an initial public offering.
SoftBank founder Masayoshi Son has been expanding his investments in South Korea – he invested in Coupang Inc which pulled off the country’s largest IPO in more than a decade. According to this Bloomberg report, Yanolja is considering a dual listing in Seoul and overseas.
Backed by Singaporean sovereign wealth fund GIC Pte Ltd and Booking Holdings, Yanolja acquired India’s eZee Technosys in 2019, and claims to be the world’s largest cloud-based hotel management solution provider, after Oracle Corp. Despite Covid-19 lockdowns, it reported a 44% increase in sales and a 16.1 billion won profit for 2020.
“We want to partner with travel brands so they become superapps”
its consumer travel superapp and Yanolja Cloud firmly established in South
Korea, it felt the time was right to expand globally. Jongyoon said there is no
plan to do a B2C superapp outside South Korea, instead it will use Yanolja
Cloud as its expansion vehicle to supply its low cost B2B solutions to the
industry. “We want to do partnerships with B2C travel brands so they can become
As an indication of future
plans, it sealed a partnership with Vietnam’s leading travel company, VNTravel,
last week. VNTravel is ranked number one in the Vietnamese travel market
with more than five million customers. It provides more than 50,000 tour and
activity products and offers deals for more than 1.5 million hotels over
multiple platforms such as Mytour.vn, Dinogo, Tripi and more than 30 mobile banking
applications from Vietnam local banks.
Yanolja currently has 100 clients in Vietnam and Jongyoon expects the number
to be accelerated with the partnership. Globally, It has 30,000 clients,
majority hotels) across 170 countries, accessing its SaaS services.
It has set up Yanolja Cloud as a separate entity in Singapore. “Currently it
is a small office. After Covid, we will hire more employees,” said Jong Yoon.
When asked if he would move to Singapore since he is CEO of Yanolja Cloud, he
said, “We will wait and see.”
Its expansion plans include South-east Asia, Africa and India, and further
afield to US and Europe.
Its differentiation from other B2B solutions providers is “an open platform
which suppliers can enjoy at low cost a variety of packaged solutions in the
cloud”. “We are providing all the components – operations, IOT, RMS, PMS, IBE, CRS … we have
an Inventory Distribution System for OTAs and hotels where they don’t have to
worry about contracts and payouts. We develop original features through AI,” he
Declining to give details,
Jongyoon said Yanolja was currently in discussions with several companies with
an eye on acquisitions, in particular, “SaaS companies for travel and
Using personalisation, automation to save energy, reduce carbon emissions
towards the future, Jongyoon is looking at three big changes – digital
technology (IoT), blockchain (decentralised identification) and AI/big data.
“These three trends will change everything in our industry, Covid 19 has
addition, he said the industry also needs to look at ESG (Environmental, Social
and Governance). “To achieve reduction in energy use and carbon emissions, we
need a data platform. We need personalisation and automation. For example, we
don’t have to provide all the amenities. If the customer needs a specific item,
we provide only that item. We should reduce paper and plastic – paper
contracts, key cards.”
Yanolja’s research showed that one hotel in its cloud can save 15,000kg of
carbon emissions, 100kg of plastic and 1.6 trees. “If we can transform all the
systems with cloud solutions for millions of hotels globally, we can do a lot
Korea, Yanolja is working on a pilot project with 300 brand hotels and a local
university to measure the savings that can come about through digital
transformation. On September 3, he will be addressing an internal APEC workshop
on the subject of how technology can help save energy in hospitality.
“We need to accelerate these measures so that we can protect our earth.”
Featured image credit: Getty Images