OYO Rooms raises $1bn, enters unicorn club
Budget hotel chain OYO Rooms has entered India's unicorn club, having raised a whopping $800mn in a round led by Japan's Softbank Vision Fund. Additionally, OYO has also received a commitment from the Japanese firm to raise another $200mn soon. While OYO didn't reveal its valuation during the current round, analysts expect the start-up to be valued at around $3-$4bn. Here are the details.
Softbank has been one of OYO Rooms' biggest investors
The latest funding round also saw participation from existing investors Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital. Notably, Softbank Vision Fund has poured tons of money into the start-up, starting with a $100mn investment in OYO in August 2015. Then, again, in September 2017, OYO Room raised another $250mn, mostly from Softbank Vision Fund.
A Softbank partner justifies the firm's interest in OYO
"With a promise to deliver good quality accommodation at affordable prices, OYO has grown exponentially to become the largest hotel chain in South Asia, and is swiftly expanding to international markets. We're tremendously excited to be a part of [it]," said Munish Varma, Partner, Softbank.
Most of the funds will be used for overseas expansion
OYO Rooms has expanded its presence to five countries - India, China, Malaysia, UK, and Nepal - in just 10-12 months. The start-up said that it would primarily use the fresh funds to speed up its overseas expansion, while using some of it to augment its presence in India. Currently, China, where OYO claims to have 87,000 rooms, is a priority.
OYO says it'll pour $600mn into its China business
"The company will direct a significant part of the funds from this round of financing, approximately $600 million, into strengthening its position in China, which is still in the early stages of growth...," said OYO in a statement.
OYO has seen tremendous growth over since 2013
Since 2013, OYO Rooms has seen tremendous growth. The company currently claims to be present in 350 cities, and claims to have over 10,000 asset partners across the aforementioned five countries. OYO also claims to host around 125,000 stayed room nights every single day! Notably, over the past year, OYO's image with customers has also improved, thanks to its Townhouse budget hotel chain.