Indian budget hotel operator Oyo Rooms has raised US$1 billion in new capital led by SoftBank’s Vision Fund with participation from Lightspeed, Sequoia, and Greenoaks Capital, to expand the company’s footprint internationally, according to TechCrunch on Tuesday. Other, unnamed investors were also involved. This round values Oyo at US$5 billion.
This is Oyo’s biggest funding round so far, having raised more than US$500 million in several rounds since it was founded in 2013, according to Crunchbase. SoftBank is already a major investor and led multiple OYO fundraising rounds in the past.
Out of the US$1 billion in funds raised, US$600 million will be spent on boosting its presence in China, a massive market it officially entered in June 2018. According to TechCrunch, Oyo claims to have listed “nearly 90,000 rooms” in the East Asian country.
Takeaways:
— Earlier this month rumours said that the company is in talks with Chinese ride-hailing leader Didi Chuxing and co-working space giant WeWork for an investment in Oyo’s Chinese business. It’s not clear whether they ended up participating. SoftBank is also a major backer of WeWork and Didi.
— Oyo may benefit by forming partnerships with other firms within SoftBank’s portfolio. Didi has already formed a partnership with multinational online travel conglomerate Booking Holdings to allow cross-app integration. Down the line, it’s possible that Oyo can leverage Didi’s ride-hailing market base to drive visitors to its hotels.
Editor: Nadine Freischlad