K Hotel, a Singapore-based hospitality firm with around 300 beds across six properties, has raised S$2 million in seed funding led by private investor Noel Neo, who has joined the startup as its chief financial officer.
Mr Neo joins K Hotel from Stewardship Asia Centre, a subsidiary of Temasek Holdings; he was previously research chief at the Asia-Pacific Real Estate Association. He also had stints at private equity fund manager Pacific Star Holdings and Singapore-listed Pacific Star Development.
K Hotel was started by brothers Ken and Kevin Cai, who are respectively chief executive officer and chief operating officer. The startup targets the budget traveller segment, similar to Singapore-based firm Reddoorz. K Hotel recently tied up with local businesses and non-governmental organisations to provide discounted-rate accommodation to foreigners stranded in Singapore due to Covid-19 travel restrictions.
The seed funds raised will go towards acquiring new hospitality projects (including hotels and hostels) on master lease terms for two to six years, as well as capital expenditure for such properties. K Hotel plans to raise S$5 million for its Series A round to further fund this expansion.
Mr Neo has also assumed the role of chief executive of K Hotel Advisors, the investment-management arm of K Hotel. K Hotel Advisors raises third-party funds to buy hotels and hostels that K Hotel operates; K Hotel Advisors earns a management fee for this.
He said: "We are seeing the emergence of a number of really unique opportunities to purchase quality assets at substantive discounts to stable market value, and position ourselves for the recovery from the pandemic.
"Hotels and hostels are available for sale to us through our proprietary networks in the industry and at significant discounts to where they were in 2019, for which we know we can generate very attractive rates of return on investment."
Read original article