Japan’s largest vacation rental company, H2O Hospitality has announced successfully disclosing US$7 million in Series B funding from Samsung Ventures, Stonebridge Ventures, IMM Investment, and Shinhan Capital. This brings the startup’s total funding to about US$18 million according to a statement.
The company had previously raised funding from 500 Startups in a seed round of US$ 1.5 million in 2016, followed by a round of US$ 10 million with Samsung Ventures in 2018, according to Crunchbase.
“We’re pleased to be part of the fastest-growing hospitality company in Japan,” said Samsung Ventures senior investment manager Eric Kim in a statement.
H2O Hospitality is known as Japan’s No.1 vacation rental management company. It is an online/off-line integrated hospitality management group that was established in 2015, which launched its ‘Wahome’ service in Korea, and in 2017 acquired online/off-line accommodation management companies in Japan to advance into the Japanese market.
To date, the company now provides 5,000 rooms on its platform, manages lodging facilities without any on-site human resources by automating all the operational flows through the property management system (“PMS”), and helps property owners to manage the platform, operations, booking, and housekeeping.
The PMS links and manages calendars between guests, rooms, and housekeepers, helping to reduce operational expenses.
“We found that the way hotels have been managing the real estate hasn’t changed over centuries and figured it was very inefficient,” said John Lee, CEO and founder at H2O. “I named our company H2O, which is a shortened version of hospitality 2.0, to show people that we are aiming to develop the second generation of an operational method for hospitality facilities that can be and should be managed without on-site human resources.”
On the basis of their strong growth each quarter, H2O’s new capital inflow will be used to meet the rapidly growing needs of the company’s working capital. The agency has been selling its rooms across 25 various domestic and global OTAs that are attributed to their property management network.
In June 2018 Japan implemented Minpaku (private lodging) law, which legalized short-term holiday rentals through social media platforms following the scarcity of lodgings, citing the tourist boom as the primary reason for this. The legislation sparked the emergence of several holiday rental platforms in Japan.
This has resulted in many monthly mansion owners to convert their structures into vacation rental facilities, and H2O has profited the most. H2O on average has made an additional 300 percent profit for property owners after the conversion of vacation rentals compared to what they did through monthly rentals.
“H2O has already proven product-market fit within Japan, and we expect them to continue to thrive as they expand outside of major cities,” added Eric Kim on his statement.