Economy

OYO grabs Series D funding of $250M led by SoftBank Vision Fund

OYO grabs Series D funding of $250M led by SoftBank Vision Fund”

Online budget hotel aggregator, OYO has raised $250 million (Rs 1600 crore) in a Series D funding round led by SoftBank through its SoftBank Vision Fund.

"We will also deploy fresh capital to take our made-in-India business model to global markets which are characterised by a similar supply-demand imbalance in real estate and hospitality", said Ritesh.

OYO said in a statement that the fresh funding will be used to strengthen its network in India, and that it also plans to expand in South East Asia (SEA) region. "Over 95% of OYO's demand comes through our own channels with no commissions to pay, and the business has a solid growth outlook".

The newly raised funds will be used to support expansion to newer markets in India and overseas.

OYO's fund-raise has been in the works for months, as the company looked for an outside investor.

The firm operates in more than 230 cities across India, Malaysia and Nepal.

Thursday's fund infusion will give OYO, which has invested substantially into improving service quality levels across properties, significant heft to expand its network and invest in its premium self-managed hotels under the Townhouse brand.

"As a business family, we have always set new paradigms, so OYO's unique business model excites us". With this round Hero Enterprise has also joined OYO as a new investor.

In an interaction with Moneycontrol recently, MMT chief executive Rajesh Magow said that the company is targeting the hotels and packages segment to contribute at least 70-75 percent of its revenue in the next 3-4 years, expressing its aggressiveness on the accommodation market.

Besides MakeMyTrip, Oyo has smaller rivals such as Treebo Hotels that raised United States dollars 34 million in Series C round led by Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital, just last month.

According to VCCEdge, the data research platform of News Corp VCCircle, OYO was valued $396-400 million in 2015, when it had raised $100 million from SoftBank.

The hotel aggregation segment in India since then has gone through consolidation post a slug of capital coming into companies like OYO and the Tiger Global-backed Zo Rooms, which shut down previous year. Well-funded online travel agencies such as MakeMyTrip, Yatra and Cleartrip are also vying for a lion's share of the budget hotel market, especially after growth slowed down in the airline ticket booking business.

In July this year, FabHotels raised $25 million in a Series B round led by Goldman Sachs Investment Partners after securing $8 million in its Series A round from a group of investors last year.



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