Homegrown hotel aggregator Oyo Rooms has closed a funding round of $250 million (Rs 1,600 crore) led by existing investor SoftBank through its SoftBank Vision Fund, reports Economic Times.
With this round of funding, Gurugram-based Oyo has also brought on board Hero Enterprise as a new investor. Existing investors Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital have also participated in the round.
This is SoftBank Vision Fund’s second major bet in India after it invested $2.5 billion in Flipkart.
According to the ET report, while the exact terms of the latest funding round have not yet been disclosed, the transaction may value Oyo Rooms at around $850 million-900 million. That is nearly double the valuation from its last reported valuation of $460 million in August 2016.
Oyo Rooms will use the proceeds of the latest round of funding to expand its presence outside India.
“We will also take this product to other international markets. We have created this made-in-India model that can go out and impact the lives of people in other countries as well… We are excited to have an innovative business, which will, over time, be a global brand to reckon,” Ritesh Agarwal, chief executive of OYO, told ET.
As per the report, South-east Asian region is likely to be the first geography where OYO will look to further expand and then deepen its footprints.
Its first international expansion was into Malaysia in January 2017 followed by an entry into Nepal in April.
“We are looking at a few markets… South-East Asia is a clear favourite, because we are already operating there, and understand how it works. It will be a natural process, but we are also looking at more mature geographies,” Agarwal said.
Softbank has so far invested $120 million into the hotel aggregator over two rounds in 2015 and 2016. And Oyo has so far raised $436 million across four rounds.
“OYO has solidified its position in India as the leading accommodation brand for consumer affordability and high quality standards. We're excited to continue to support OYO as they further expand their position in India and bring the OYO promise of affordability and elevated hospitality to other markets around the world,” Justin Wilson, SoftBank’s board representative in Oyo, said in a statement.
“The differentiated thinking and ingenuity that Ritesh and his team bring to this industry gives us confidence that OYO can scale, innovate and set new benchmarks in customer experience,” Sunil Kant Munjal, chairman of Hero Enterprise told ET.
Oyo currently operates 8,500 hotels and 70,000 rooms in more than 230 cities across the country. It has seen several startups such as Zo Rooms, Fab Hotels, Treebo Hotels come as competition. In fact it also competes with Nasdaq-listed online travel aggregators MakeMyTrip and Yatra.
Agarwal told ET that OYO was recording book revenue run rate of close to $600 million, and its average daily realised room nights was growing at 30% on a quarterly basis.
“Some of our competitors have launched their own white-label brands to compete with us. But at the end of the day, are you able to deliver the customer service that the consumer wants, along with the asset management that partner is looking for, rather than a sales discounting service? Our numbers speak for themselves,” he added.