Oyo will combine its technology strengths and operations expertise with China Lodging Group's extensive coverage and strong development capability in China.

Oyo raises 10 million strategic funding from China Lodging Group
Atom Fund Raising Thursday, September 14, 2017 - 16:54

Is it back to good days for the startups as far as funding is concerned? Well it would definitely appear so if one went by the ease with which some of the Indian startups are suddenly in the news for additional rounds of funding. The latest to gain is hotel aggregator Oyo Rooms.

Just a week after it raised funds from SoftBank Vision Fund, Oyo Rooms has been another $10million from a Chinese hospitality firm, China Lodging Group.

However, this investment must be seen more as a strategic participation by the Chinese investor and Oyo also may stand to gain in terms of the business generated through this association with China Lodging Group.

“This partnership will allow us to facilitate, strengthen and build a global market leading hospitality business. It will combine the technology strengths and operations expertise of OYO with China Lodging Group's extensive coverage and strong development capability in China,“ Ritesh Agarwal, CEO of Oyo told ET. 

The investment will happen as a follow-on to Oyo’s recently announced Series D financing of USD 250 million led by SoftBank Vision Fund. There were other investors in the consortium, the most notable among them being Hero Enterprise, an offshoot of the cycles and motorcycles major Hero Group led by Sunil Munjal.

The numbers are indeed staggering. The Chinese group operates several brands of hospitality chains and 612 hotels are functioning either through the franchise route or in the “manachised” model (managed and franchised, both) and the total number of rooms being managed will be over 350, 000.

Oyo has confirmed that going ahead there may be plans to exchange the domain expertise among the staff of Oyo and the Chinese partner and sharing technological inputs may also figure in the working relationships between the two.

OYO has, in its inventory, 70, 000 rooms across 230 cities in India and the number of hotels it controls is around 8500. And with OYO expecting the mid-market accommodation business in India would be worth $20billion in 3 years from now. Obviously, OYO wants to cash in on this lucrative segment to the maximum extent feasible.

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