Southeast Asia’s leading online travel company Traveloka has raised US$350 million from Expedia. The US giant will also collaborate with its Indonesian counterpart on global hotel booking, says a statement from Expedia announcing the investment.
With this, Traveloka has raised US$500 million in total over the last year, the statement discloses. East Ventures, Hillhouse Capital Group, Sequoia Capital, and Chinese ecommerce giant JD contributed to two earlier rounds of funding.
“The partnership gives Traveloka travelers access to a diverse set of international accommodations and we are looking forward to working with Expedia to expand our services in Asia and beyond,” says Traveloka co-founder and CEO Ferry Unardi.
Conversely, Expedia is looking to leverage Traveloka’s local knowledge to deepen its presence in Southeast Asia. Traveloka partners over 100 domestic and international airlines, and serves consumers in Indonesia, Thailand, Vietnam, Malaysia, Singapore, and the Philippines with different payment options and a variety of accommodation from hotels to homestays. Traveloka says its mobile app has been downloaded 20 million times.
US, Chinese giants drawn to SEA
The Expedia investment comes close on the heels of the launch of Amazon Prime Now in Singapore, the US ecommerce giant’s first foray into Southeast Asia.
The region’s growth potential is attracting both US and Chinese tech giants. Alibaba made a US$1 billion investment for a controlling stake in ecommerce site Lazada. The Chinese giant is also reported to be leading a US$500 million funding round for Indonesia’s Tokopedia.
The transportation space has also heated up, with Go-Jek of Indonesia raising a US$1.2 billion round led by China’s Tencent, and Singapore-headquartered Grab raising US$2 billion from Chinese counterpart Didi Chuxing and Japanese giant SoftBank. The Southeast Asian ride-hailing apps sense an opportunity as their American rival Uber grapples with leadership and culture issues.
A study by Google and Temasek last year forecast an online spend of US$197 billion in Southeast Asia by 2025, which is over six times the 2015 level. Online travel will account for more than a third of it.
The study points out that more than two-thirds of the region’s population is aged below 40 and increasingly value traveling as their incomes rise. That is the opportunity drawing Expedia and other US and Chinese giants into investing in Southeast Asia.