Investors in LatAm get bitten by the hotel investment bug as Ayenda raises $8.7 million

Some of Latin America’s leading venture capital investors are now backing hotel chains.

In fact, Ayenda, the largest hotel chain in Colombia, has raised $8.7 million in a new round of funding, according to the company.

Led by Kaszek Ventures, the round will support the continued expansion of Ayenda’s chain of hotels in Colombia and beyond. The hotel operator already has 150 hotels operating under its flag in Colombia and has recently expanded to Peru, according to a statement.

Financing came from Kaszek Ventures and strategic investors like Irelandia Aviation, Kairos, Altabix and BWG Ventures.

The company, which was founded in 2018, now has more than 4,500 rooms under its brand in Colombia and has become the biggest hotel chain in the country.

Investments in brick and mortar chains by venture firms are far more common in emerging markets than they are in North America. The investment in Ayenda mirrors big bets that SoftBank Group has made in the Indian hotel chain Oyo and an investment made by Tencent, Sequoia China, Baidu Capital and Goldman Sachs, in LvYue Group late last year, amounting to “several hundred million dollars”, according to a company statement.

“We’re seeking to invest in companies that are redefining the big industries and we found Ayenda, a team that is changing the hotel’s industry in an unprecedented way for the region”, said Nicolas Berman, Kaszek Ventures partner.

Ayenda works with independent hotels through a franchise system to help them increase their occupancy and services. The hotels have to apply to be part of the chain and go through an up to 30-day inspection process before they’re approved to open for business.

“With a broad supply of hotels with the best cost-benefit relationship, guests can travel more frequently, accelerating the economy,” says Declan Ryan, managing partner at Irelandia Aviation.

The company hopes to have more than 1 million guests in 2020 in their hotels. Rooms list at $20 per-night, including amenities and an around the clock customer support team.

Oyo’s story may be a cautionary tale for companies looking at expanding via venture investment for hotel chains. The once high-flying company has been the subject of some scathing criticism. As we wrote:

The New York Times  published an in-depth report on Oyo, a tech-enabled budget hotel chain and rising star in the Indian tech community. The NYT wrote that Oyo offers unlicensed rooms and has bribed police officials to deter trouble, among other toxic practices.

Whether Oyo, backed by billions from the SoftBank  Vision Fund, will become India’s WeWork is the real cause for concern. India’s startup ecosystem is likely to face a number of barriers as it grows to compete with the likes of Silicon Valley.

SpaceX said to be seeking around $250 million in funding, boosting valuation to roughly $36 billion

SpaceX is looking to raise around $250 million in new funding according to a new report from CNBC’s Michael Sheetz. The additional cash would bring SpaceX’s total valuation to around $36 billion, according to CNBC’s sources — an increase of more than $2.5 billion versus its most recently reported valuation.

The rocket launch company founded and run by Elon Musk is no stranger to raising large sums of money — it added $1.33 billion during 2019 (from three separate rounds). In total, the company has raised more than $3 billion in funding to date — but the scale of its ambitions provides a clear explanation of why the company has sought so much capital.

SpaceX is also generating a significant amount of revenue: Its contract to develop the Crew Dragon spacecraft as part of the NASA commercial crew program came with $3.1 billion in contract award money from the agency, for example, and it charges its customers roughly $60 million per launch of one of its Falcon 9 rockets. Last year alone, SpaceX had 13 launches.

But SpaceX is also not a company to rest on its laurels, or its pre-existing technology investments. The company is in the process of developing its next spacecraft, dubbed “Starship.” Starship will potentially be able to eventually replace both Falcon 9 and Falcon Heavy, and will be fully reusable, instead of partially reusable like those systems. Once it’s operational, it will be able to provide significant cost savings and advantages to SpaceX’s bottom line, if the company’s projections are correct, but getting there requires a massive expenditure of capital in development of the technology required to make Starship fly, and fly reliably.

Musk recently went into detail about the company’s plans to essentially build new versions of Starship as fast as it’s able, incorporating significant changes and updates to each new successive version as it goes. Given the scale of Starship and the relatively expensive process of building each as an essentially bespoke new model, it makes perfect sense why SpaceX would seek to bolster its existing capital with additional funds.

CNBC reports that the funding could close sometime in the middle of next month. We reached out to SpaceX for comment, but did not receive a reply as of publication.

Trump’s Election Day YouTube takeover plan feels very different in 2020

According to a report from Bloomberg, the Trump campaign called dibs on some of the most prized ad space online in the days leading up to the 2020 U.S. election.

Starting in early November and continuing onto Election Day itself, the campaign will reportedly command YouTube’s masthead, the space at the very top of the video sharing site’s homepage. YouTube is now the second most popular website globally after the online video platform overtook Facebook in web traffic back in 2018. Bloomberg didn’t report the details of the purchase, but the YouTube masthead space is reported to cost as much as a million dollars a day.

The Trump campaign’s ad buy is likely to rub the president’s many critics the wrong way, but it isn’t unprecedented. In 2012, the Obama campaign bought the same space before Mitt Romney landed the Republican nomination. It’s also not a first for the Trump campaign, which bought banner ads at the top of YouTube last June to send its own message during the first Democratic debate.

Screenshot of the Trump campaign’s June 2019 YouTube ads via NPR/YouTube

In spite of the precedent, 2020 is a very different year for political money flowing to tech companies — one with a great degree of newfound scrutiny. The big tech platforms are still honing their respective rules for political advertising as November inches closer, but the kinks are far from ironed out and the awkward dance between politics and tech continues.

The fluidity of the situation is a boon to campaigns eager to plow massive amounts of cash into tech platforms. Facebook remains under scrutiny for its willingness to accept money for political ads containing misleading claims, even as the company is showered in cash by 2020 campaigns. Most notable among them is the controversial candidacy of multi-billionaire Mike Bloomberg, who spent a whopping $33 million on Facebook alone in the last 30 days. In spite of its contentious political ad policies, much-maligned Facebook offers a surprising degree of transparency around what runs on its platform through its robust political ad library, a tool that arose out of the controversy surrounding the 2016 U.S. election.

On the other end of the spectrum, Twitter opted to ban political ads altogether, and is currently working on a way to label “synthetic or manipulated media” intended to mislead users — an effort that could flag non-paid content by candidates, including a recent debate video doctored by the Bloomberg campaign. Twitter is working through its own policy issues in a relatively public way, embracing trial-and-error rather than carving its rules in stone.

Unlike Twitter, YouTube will continue to run political ads, but did mysteriously remove a batch of 300 Trump campaign ads last year without disclosing what policy the ads had violated. Google also announced that it would limit election ad targeting to a few high-level categories (age, gender and ZIP code), a decision the Trump campaign called the “muzzling of political speech.” In spite of its strong stance on microtargeting, Google’s policies around allowing lies in political ads fall closer to Facebook’s anything-goes approach. Google makes a few exceptions, disallowing “misleading claims about the census process” and “false claims that could significantly undermine participation or trust in an electoral or democratic process,” the latter of which leaves an amphitheater-sized amount of room for interpretation.

In recent years, much of the criticism around political advertising has centered around the practice of microtargeting ads to hyper-specific sets of users, a potent technique made possible by the amount of personal data collected by modern social platforms and a strategy very much back in action in 2020. While Trump’s campaign leveraged that phenomenon to great success in 2016, Trump’s big YouTube ad buy is just one part of an effort to see what sticks, advertising to anybody and everybody in the splashiest spot online in the process.

YouTube declined to confirm to TechCrunch the Trump campaign’s reported ad buy, but noted that the practice of buying the YouTube masthead is “common” during elections.

“In the past, campaigns, PACs, and other political groups have run various types of ads leading up to election day,” the spokesperson said. “All advertisers follow the same process and are welcome to purchase the masthead space as long as their ads comply with our policies.”