Vision Fund commits $1.7b to Korean travel start-up Yanolja

The investment takes Yanolja’s valuation to more than KRW10 trillion ($9 billion), according to a Bloomberg report referenced by the company in a LinkedIn post. The report added that Yanolja is preparing for an IPO, although it has yet to decide on a listing location.

The company was established in 2005 by Su-jin Lee, a former motel manager. It initially functioned as an information and booking portal for motels and guesthouses, and then branched into facility management, operating hundreds of properties in Korea, including a line of upscale love hotels.

Today, Yanolja is an online travel agent responsible for a super app through which users can make accommodation, leisure, and transportation bookings. In recent years, it has expanded into business services through a cloud-based platform that integrates hotel operations, from booking management and contactless check-in to billing and housekeeping services.

The company has become the world’s second-largest property management software provider – trailing only Oracle – with around 30,000 licensees. CEO Jong-yoon Kim told Reuters that it could reach 500,000 licensees by 2025. Yanolja currently works with 9,000 hotels in Korea, 6,000 in Southeast Asia, 6,000 in India, and 3,000 in Africa.

Despite COVID-19 severely curtailing global travel in 2020, the company achieved both net growth and gains in operating profit last year.

The new funding will go towards technology development – Yanolja already claims to use the internet of things, artificial intelligence (AI), big data, and blockchain in its solutions – and geographic expansion. A specific goal is to create an advanced, and increasingly automated, global travel platform, leveraging AI and personalized offerings based on big data analysis.

"Powered by AI, we believe Yanolja is a leader in transforming the travel and leisure industry in South Korea through its travel super app approach," said Greg Moon, a managing partner at SoftBank Investment Advisors, in a statement.

The company raised several rounds of funding from the likes of Partners Investment, SL Investment, and Skylake Investment. It achieved unicorn status in 2019 when GIC and Booking Holdings together committed $180 million.

SoftBank is no stranger to making big bets on Korean start-ups. It invested around $3 billion in e-commerce platform Coupang between 2015 and 2018, helping the company power through an uncertain, high cash-burn phase. Coupang listed in the US in March and has a market capitalization of around $74 billion. Vision Fund 1 is sitting on an unrealized gain of $24 billion.

SoftBank said in 2019 that it had $108 billion in commitments for Vision Fund 2. However, problems with the Fund I portfolio led to a suspension of marketing. Fund II now comprises $30 billion from SoftBank’s balance sheet and there are no immediate plans to raise third-party money. Deployment continues apace, with Korean education app Riiid among the portfolio additions this year.

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• Topics
• North Asia
• Expansion
• Technology
• Consumer
• South Korea
• Growth capital
• Softbank
• TMT
• Travel