India: SoftBank-backed OYO gets $10m from China Lodging Group

OYO Rooms founder Ritesh Agarwal. Photo: Ramesh Pathania/Mint

China Lodging Group, a leading multi-brand hotel group in China, has partnered with India’s hospitality company Oravel Stays Pvt Ltd – which runs the business under the brand name OYO – to facilitate and strengthen collaboration to build a global market leading hospitality business.

As part of the strategic partnership, OYO has raised $10 million from the Chinese company and diluted less than 5 per cent stake, according to a statement.

Last week, OYO raised $250 million in a fresh round of funding led by SoftBank, an existing backer, and new investor Hero Enterprise. Existing investors Lightspeed Ventures, Greenoaks Capital, and Sequoia India had also participated in the Gurgaon-based company’s Series D round.

China Lodging Group and OYO will explore opportunities in areas like knowledge and technology sharing, strategic alliances and partnerships in various areas, new venture partnership opportunities and investment, according to an official statement.

“The partnership will draw on the strengths of China Lodging Group’s visionary and experienced management team, market leadership through a multi-brand strategy, extensive hotel operations expertise and strong loyalty program and OYO’s advanced technologies in the hospitality industry that enable transformation of hotel operations,” said Jenny Zhang, CEO, China Lodging Group.

Founded in 2013, OYO currently has 8,500 hotels and 70,000 rooms in around 230 cities on its platform. These include hotels in major metros, regional hubs, leisure destinations as well as pilgrimage towns. It also has presence in Malaysia and Nepal.

“OYO is a new-age technology company disrupting the hospitality industry with category-leading capabilities of using technology to transform existing supply and standardise operations and distribute these through online and offline channels. Addressing consumers in India and China – two of the world’s fastest-growing markets – through our combined strengths opens up a large and significant growth opportunity,” said Ritesh Agarwal, founder and CEO of OYO Rooms.

Founded in 2013, OYO currently has 8,500 hotels and 70,000 rooms in around 230 cities on its platform. These include hotels in major metros, regional hubs, leisure destinations as well as pilgrimage towns. It also has presence in Malaysia and Nepal.

China Lodging Group primarily focuses on economy and mid-scale hotel segments. As of As of June 30, 2017, the company had 3,541 hotels or 359,530 rooms in operation in 369 cities under the bands like Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, CitiGo Hotel, VUE Hotel, Crystal Orange Hotel, Orange Hotel Select, Orange Hotel and Manxin Hotel.

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