Tech Talk: An 'almost' exit and some scale-up at KTown Rooms.

Byline: Mutaher Khan

THE Pakistani ecosystem finally seems to have grown accustomed to investment rounds and venture capitalists (VCs) pouring in stacks of dollars. With big bucks come big risks, and sometimes exits.

A glimpse of that came in last November at a startup conference when FindAMyAdventure annoAuAnced its acquisition of a fellow hospitality startup, KTown Rooms.

Barely three months down the line, both parties confirmed to Dawn the deal has been called off.

But before getting into the why, let's first talk about what KTown is.

CEO Khizer Ahmed hopes to build an Oyo-inspired standardised hotel brand for the local market.

A Karachi-based (shocking!) startup, Ktownrooms.com lets you discover and book hotel rooms online. Just go to the website, choose your dates and the city, and start searching. You can also sort by price or filter according to categories (budget, elite, premium and flagship) and proceed to the checkout if it looks good. The payment can be either made in cash at the time of check-in or online via Easypaisa or bank transfers.

However, limiting the company to just an aggregation and booking platform would be wrong.

Inspired by India's Oyo - which changed the landscape of domestic (at first) hospitality industry by bringing online budget hotels, marketing them under its own brand and eventually switching to franchising model - and a couple more startups, KTown applies a similar approach in Pakistan, using a mix of managing leased properties and franchises.

There is also a standardisation of some basic services. At the bare minimum, they promise to offer: WiFi, hygienic bedding, clean bathroom, AC, cable television and free breakfast.

But the idea of an Oyo-style local startup would have seemed lucrative maybe two months ago. Today, it's marred by a bunch of questions on whether that model is even sustainable. The Indian giant, rightly credited with disrupting the industry, did at a huge cost, thanks to billions of dollars poured in by SoftBank which allowed it to offer good discounts and scale rapidly.

But after a troublesome 2019 for the Japanese investor, owing in no ordinary part to WeWork which, it was forced to reassess a bit and finally give some regard to profitability as well. As a result, Oyo was also asked to pursue the same goal by mid-2020, which has resulted in massive layoffs and scale backs.

Sure, KTown is nowhere close (either in its discounts or expansionist dreams) but these questions on a business...