Airbnb said to mull investing in India’s OYO to expand footprint

An employee makes a bed in a room at an an Oyo Townhouse in Bengaluru on Sept. 11. Photographer: Samyukta Lakshmi/Bloomberg

As it looks to strengthen its hotel booking business, global accommodation-sharing site Airbnb is reportedly in discussions to invest around $100-200 million in SoftBank-backed Indian hotel chain OYO.

According to a source-based report in The Information, the investment in OYO wold help Airbnb to meet its growth goals in India and China.

The report comes on the heels of the US-based accommodation rental firm acquiring HotelTonight, an app for finding hotel rooms at a discount, for an estimated $400 million. The acquisition is seen as a move by Airbnb to get a share of the hotel-booking business to attract a wider variety of travellers ahead of its planned initial public offering.

“If you look at what we do, it is very different from what Oyo does or anyone else for that matter. I think we each have our own approach to the market, and we each have a loyal following, and a sizable following,” Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer said in a recent interview to The Economic Times.

“We see robust growth, especially in the domestic market. Domestic travel grew 78% just in the last year. That’s the future opportunity. Out of the total addressable market of India, three-fourths is domestic travel. Our trend is heading in that direction,” Blecharczyk said in a separate interview to Mint, while commenting on the Indian market.

In India, OYO is currently available across 259 cities with 8,700 buildings and 173,000 rooms. Globally, the company is present in over 500 cities and 10 countries  – India, China, Malaysia, Nepal, the UK, UAE, Indonesia, Saudi Arabia, the Philippines and more recently, Japan. It counts India and China as two of its biggest markets.

After announcing a $600-million investment plan for China in September last year, OYO recently said it planned to invest $200 million to expand its operations in India and South Asia.

If the talks materialise, Airbnb would join the league of SoftBank, Sequoia Capital and Grab that have contributed to the $1.5 billion that OYO has raised till date, bringing it to a current valuation of around $5 billion.

Last month, it reportedly raised $100 million from China’s ride-hailing giant Didi Chuxing. In December, it raised $100 million in a Series E round of funding from Singapore ride-hailing company Grab to expand its services in Southeast Asia. In September, OYO garnered $800 million from investors led by SoftBank Vision Fund, Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital.

Last year, Airbnb had also acquired French property management startup Luckey Homes in December, as well as picking up a minority stake in co-working space startup The Wing.

Also Read:

Airbnb buys HotelTonight, makes further inroads into hotel booking

SoftBank-backed OYO to invest $200m in expanding India, South Asia ops

 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.