Singapore’s Grab confirms $100m investment in SoftBank-backed OYO Hotels

Grab co-founder Anthony Tan
Grab co-founder Anthony Tan. Photographer: Ore Huiying/Bloomberg

Singapore-based ride-hailing major Grab has confirmed a $100-million investment in OYO Hotels & Homes, which is said to be a part of the budget hotels firm’s ongoing $1-billion funding round.

“We can confirm the investment into OYO,” said a spokesperson from Grab.

Both SoftBank-backed firms are likely to find synergy in their plans to expand within Asia, especially in Indonesia.

“We are excited about the potential partnership opportunities with OYO especially on the payments front. For example, a partnership could see GrabPay become the preferred online payment method for OYO and for GrabPay to be accepted in all OYO hotels in Southeast Asia. This creates another powerful use case for GrabPay in the rapidly growing travel market in the region,” added the spokesperson.

DEALSTREETASIA has not received any response from OYO so far.

According to recent reports, SoftBank Group has asked Grab to forge alliances with portfolio companies from its mammoth Vision Fund looking to enter and expand in Southeast Asia.

Oyo is present in five countries currently – China, Malaysia, the UK and Nepal, besides India and Indonesia, where it entered in October. At the time, OYO had announced its plans to invest over $100 million in the country as part of its expansion in Southeast Asia.

The Gurgaon-based company plans operations in Indonesia in three cities – Jakarta, Surabaya and Palembang with over 30 exclusive hotels and more than 1,000 rooms. It plans to expand into the top 35 cities in Indonesia, including Yogyakarta, Bandung and Bali, over the next 15 months.

OYO had said in September that it received commitments for another $1 billion from existing investors, including Japan’s SoftBank Group and others as it looks to expand in India and China, and enter into new territories.

The fresh round of funding was led by SoftBank Investment Advisers (SBIA) through SoftBank Vision Fund, with participation from Sequoia Capital, Lightspeed Venture Partners, and Greenoaks Capital. The investors pumped in $800 million in the latest round with commitments for another $200 million, valuing the Indian startup at about $5 billion.

According to regulatory filings by OYO Hotels, the proposed investment was made through A1 Holdings Inc., an entity controlled by Grab, which was valued at $11 billion at the close of its funding round in August.

Meanwhile Grab, which acquired rival Uber’s Southeast Asian business in March, is embroiled in power play with Indonesia’s ride-hailing and logistics startup Go-Jek.

Grab itself is on a fundraising spree and is on track to raise $3 billion by the end of 2018. The ride-hailing giant has secured about $2.75 billion so far, with recent commitments from Microsoft, Booking Holdings, Hyundai Motor, Kasikorn Bank and United Overseas Bank (UOB).

Last month, DEALSTREETASIA exclusively reported that US payments firm, Paypal is likely to join Grab’s ongoing Series H round. No details about the quantum of investment was revealed.

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