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.