Just three to four years ago, startup success in Southeast Asia was synonymous with aggressive expansion, sky-high burn rates, and a singular obsession with scale. ‘Growth at any cost’ was the prevailing mantra—fuelled by abundant capital, wide-open markets, and investor appetite for hypergrowth over sustainability.

Driven by FOMO, both foreign and domestic investors poured funds into startups, pushing valuations to unsustainable heights and giving rise to a wave of regional unicorns.

Then came COVID-19, which brought the global economy—and the startup boom—crashing to a halt. Hospitality and tourism, two of the most affected sectors, saw widespread closures and pivots. Startups were forced to reckon with reality, and the once-celebrated blitzscaling playbook lost its edge.

By the time recovery was underway, investor sentiment had fundamentally shifted. The days of funding loss-making ventures purely on potential were over. In this new landscape, profitability—and a clear path to it—became the litmus test for investment. Reckless capital deployment gave way to strategic restraint.

At RedDoorz, we were not immune to the shockwaves. But through grit, focus, and a willingness to adapt, we weathered the storm—and emerged stronger. In 2024, after years of sustained effort, we achieved our first year of positive adjusted earnings. This wasn’t luck. It was the result of deliberate choices and a mindset shift from chasing scale to building staying power.

Profit vs purpose: Can Southeast Asia’s startups strike a balance?

Startups have always been powered by vision: disrupting the status quo, empowering users, and bridging gaps in access and convenience. That sense of purpose is still critical—but in today’s environment, it must be anchored by financial discipline.

As interest rates surged and investor caution rose, the ‘growth at all costs’ philosophy lost its shine. For many founders, this meant going back to basics—focusing on core markets, doubling down on what worked, and shedding what didn’t.

At RedDoorz, we made bold yet necessary decisions to sharpen our focus. We doubled down on the high-potential, underserved markets of Indonesia and the Philippines—together accounting for 95 per cent of our revenue in 2023. At the same time, we exited slower-growth markets like Singapore and Vietnam, and divested KoolKost, our long-stay accommodation arm, selling it to Malaysia-based LiveIn earlier this year.

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These were not easy choices, but they were purposeful. And they allowed us to simplify, concentrate our resources, and cross the critical threshold into profitability.

Choosing depth over breadth

In hospitality, a crowded and competitive sector, our edge lies in how deeply embedded we are in our core markets. Since 2015 in Indonesia and 2018 in the Philippines, we’ve built meaningful relationships with local hotel partners, strengthened our brand presence, and delivered real value through technology and customer loyalty.

Even with a tighter geographical footprint, we grew revenue by 14 per cent in 2024—nearly 20 per cent in local currency in our core markets alone. For 2025, we’re aiming for 30–40 per cent growth, with a revenue target of US$36M million.

We’re also evolving with our customers. Many of those who first stayed with us early in their careers now seek more premium experiences. We’re growing with them through our lifestyle brand Sans and villa offering Lavana.

The automation advantage

Over the past few years, we’ve invested heavily in automating repetitive processes. Tasks like customer support and room allocation are already handled without human input. We’re now expanding automation to include check-ins, checkouts, and payments.

This isn’t about replacing people—it’s about future-proofing our operations. In a low-margin industry like hospitality, automation isn’t just a nice-to-have; it’s a strategic imperative. It enables us to scale efficiently, improve margins, and deliver consistent quality at every touchpoint.

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IPO? We’re playing the long game

We’ve been exploring a potential IPO since 2019, and while it remains on the table, we’re not in a rush. Our priority is building a profitable, resilient business that can thrive in any market cycle.

That said, we remain open to M&A opportunities—whether to re-enter past markets or expand into new ones. We’re also closely monitoring other regional IPOs. With several larger players ahead in the queue, patience and timing will be key.

The new era of Southeast Asia’s startup ecosystem

Southeast Asia is at a turning point. The region’s startup ecosystem is maturing, and with that maturity comes a new set of expectations: discipline, clarity, and a genuine path to profitability.

At RedDoorz, our evolution from breakneck growth to sustainable scale mirrors the broader transformation underway. We’ve learned that success doesn’t lie in chasing every opportunity—it lies in making the right choices, executing with precision, and staying focused on long-term value.

There’s no one-size-fits-all formula for building a great company in Southeast Asia. But one principle is clear: smart growth is sustainable growth. As the dust settles and a new era begins, the startups that can harmonise purpose with profit—and balance short-term agility with long-term vision—will not only endure but define the region’s next chapter of innovation.

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