Indian budget hotel booking company Oyo Rooms is in talks with Chinese ride-hailing giant Didi Chuxing and co-working space operator WeWork to fundraise for its Chinese business, according to the Times of India citing people familiar with the matter.
Oyo Rooms is looking to raise US$500 million to US$600 million for its China business, and US$500 million for its India business, says the same article, adding that Oyo’s China business will be valued at around US$1.2 billion, while its India operations will be valued at US$4.5 billion.
The firm is already well-funded. According to CrunchBase, it has raised more than US$450 million since its founding in 2013, from backers including SoftBank, Lightspeed Venture Partners, and Sequoia Capital. It launched its services in China in November 2017, and is said to have added 50,000 rooms on its platform since. That’s already nearly half the number of rooms it has in India.
There have been multiple rumours about Oyo Rooms’ fundraising. A cash injection from Tencent seemed to have been in the cards. But this, again according to the Times of India article, reportedly fell through, possibly due to disagreements about the valuation which was set at US$2 billion.
— After growing to 50,000 rooms in one year, Oyo Rooms seems to be set on doubling down on China, raising funds specifically to boost its China operations.
— While talks with Tencent for potential funding apparently fell through, Oyo Rooms now might leverage capital from big players like Didi Chuxing and WeWork. All three firms count SoftBank as one of their major backers.
— Aligning interests with Oyo might benefit Didi and WeWork, as it creates many possible synergies. For example, the ride-hailing giant can better market its transport services to those booking hotels in tier 2, 3 and 4 cities.
— If this goes forward, this deal will mark the second time Didi backs an Indian company. The first was ride-hailing service Ola in 2015
Editor: Nadine Freischlad