Local rental market platform Luxstay has successfully secured additional $6 million in venture capital funding via the Shark Tank Vietnam progamme this week, gearing itself up to compete with international rivals like Airbnb.
Three private investors or ‘sharks’ have agreed on spending $2 million each on Luxstay upon its impressive presentation on the reality show.
Luxstay CEO Steven Nguyen convinced the sharks with two distinctive advantages that Luxstay currently has: the booming real estate market in the country which gives rise to new types of accommodation supply like homestay, serviced apartments and investment properties, and Luxstay being the first of its kind in Vietnam with sound financial and technical backups to leverage such abundant resource.
“We have witnessed a huge market demand for short-term stays. Luxstay has not only met the accommodation needs of pleasure and business visitors, but also created a new demand for corporate accommodation and events, which is a niche market that no other players have exploited here,” said the CEO of Luxstay.
According to Nguyen, Vietnam has a hefty young population with an appetite for products and services developed and delivered via disruptive technology platforms. The accommodation-sharing platform as in the case of Luxstay thus has what it takes to flourish, as home-sharing segment in Vietnam is growing fast and will continue budding in the coming years.
“The segment could reach a minimum scale of 10-20 per cent of the total accommodation market spending, worth of some $15 billion in 2025,” said Nguyen.
When confronted with questions by the sharks on how Luxstay is different from other players in the field and what makes it succeed given the presence of Airbnb, Nguyen stated that it was the determination and ambition of the young Vietnamese generation that dares to create and lead a new trend in the sharing economy. “If it was not us who did it, the business would be exploited by foreign companies.”
What’s more, Luxstay is different from Airbnb in a sense that it takes the local market at heart. With solid understanding of the local market, the startup is confident to go faster than its rival. And in the near future, Luxstay will tap into the regional markets and those with a large number of tourists to Vietnam, to expand its customer portfolio.
According to Luxstay, the startup is currently building a network of partners, consisting of property and business owners, who have been provided with solutions to help them manage their rental properties in a sufficient and effective manner.
It is also planning to work with property developers to fatten the supply of homestay properties to the market.
Luxstay aims at an annual revenue of $300 by 2023, accounting for 30 per cent of the home-sharing market segment. The startup has been working on its upcoming series A financing round with various numerous investors and strategic partners, expecting to raise at least $15-20 million more within the course of 2019.
The additional $6 million will now be giving Luxstay a push to get closer to its set target.
Prior to being invested by the sharks, Luxstay had raised several round of funding from foreign investors including Genesia Ventures, CyberAgent Ventures, ESP Capital, Founders Capital, and Nextrans.
Lately, Luxstay has productively raised a $4.5-million bridge loan from Korean-backed GS Home Shopping (GS Shop) and BonAngels, marking a substantial early stage investment for a Vietnamese startup.
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