This is the startup’s first fundraising round supported by foreign investors, the hotel booking platform said in a statement.
The identity of the other investors in the company was not disclosed.
The round is led by Wu’s FengHe Fund Management and Hancock Revocable Trust, and marks one of the largest Series A investments in a Vietnamese internet startup from foreign investors. It comes less than a month since the company launched its commercial site www.vntrip.vn.
John Wu, who was Alibaba’s CTO in the 2000-2007 period, was named “China Angel Investor of the Year” in 2014 by the Chinese edition of Entrepreneur. He was also an investment partner of Northern Light Venture Capital, a VC firm with $1 billion assets under management. Wu currently heads FengHe Fund Management.
Scott Hancock, who runs Hancock Revocable Trust, has more than 20 years private equity and early stage investing experience while holding senior positions at Oak Hill Capital, Continuity Capital Partners and Deep Sky Capital.
Both lead investors will have board seats at Vntrip.vn.
“The financing will be used to serve the expansion roadmap of Vntrip.vn, starting with offering free shuttle services from the airports for customers booking through the platform. The proceeds will also be used to provide discounts and free stay for loyal customers,” the company said.
Founded in 2014, Vntrip.vn had tied up with Booking.com, a unit of America’s $65-billion Priceline Group, to establish one of Vietnam’s largest online hotel booking networks. It is currently connected to over 906,000 Vietnamese and international hotels.
Vntrip.vn was also the first Vietnamese OTA startup to have a mobile hotel booking app, the company’s statement added.
“Hancock Revocable Trust is excited to be an early-stage investor in Vntrip.vn because we can see the opportunity to build the dominant market leader in an industry that will reach nearly $1 billion in revenue within the next five years,” said Hancock.
“The opportunity for Vietnam’s leading OTA is enormous. Lam and his management team have already proven to have an uncanny ability to tap into this market with immediate success,” Wu said.
Prior to Vntrip.vn, several booking and tourism startups from Vietnam or having operations in the country have raised venture capital funding within the past year. Triip.me, a platform that provides customized tours, secured $500,000 investment from Gobi Partners earlier this year, while last-minute hotel booking app HotelQuickly is busy working for a series B financing after having attracted $6 million funding.
Despite a difficult year of 2015 for the hotel industry in Vietnam, caused by a crisis in some major economies, the sector still grossed VND338 trillion ($15 billion), according to a Grant Thornton report. It was 40 per cent higher than the previous year’s turnover thanks to the strong growth of local guests. However, only 8 per cent of hotel revenues are booked online and a mere 1 per cent by local Vietnamese, Vntrip.vn said.