India: Unicorn Oyo set to tap 2020 Olympic Games demand with Japan foray

Ritesh Agarwal. Photographer: Samyukta Lakshmi/Bloomberg

Oyo Rooms, the newest unicorn in India, is all set to launch its operations in Japan as it eyes a dominant market share in Japan’s budget hotel market ahead of the 2020 Olympic Games, according to two people close to the development.

Japan is also the home market for Oyo’s largest investor SoftBank. According to one of the two people mentioned above, the recent round of investment from SoftBank will be part dedicated to Oyo’s aspirations in Japan.

Earlier this month, Oyo raised $800 million from Japan’s SoftBank Vision Fund and other investors, taking the company’s valuation to about $4 billion.

Of the $800 million, Oyo said it would invest around $600 million to strengthen its position in China.

Oyo’s website already lists at least two properties in Shinjuku, Tokyo.

The company has started recruiting for the Japan operations, according to sources who requested anonymity.

However, it is not going to be an easy battle in Japan. According to a recent article in Japan Times, several local and international companies are jumping into the hotel business and concerns of an oversupply are on the rise.

Oyo, run by Oravel Stays Pvt LTD, has been on an international expansion spree. The Gurugram-based company has set up operations in five countries within the last 12-18 months.

The company is now present in India, China, Malaysia, the UK and Nepal.

Oyo recently announced its presence in 26 Chinese cities, including Hangzhou, Xian and Guangzhou. The hotel chain employs more than 1,000 people in China.

Founded in 2013 by Ritesh Agarwal, Oyo was one of the breakout startups from the funding boom of 2015, raising a surprise $100 million from SoftBank. However, poor service by hotels slowed its aggressive expansion plans. Oyo, which began as a marketplace, today controls room inventory and is bullish on its new brand, Townhouse.

The brand was launched in January 2017 and played a key part in improving Oyo’s image with customers. Townhouse properties are owned by Oyo and fully managed by the company’s staff, working like any other branded budget hotel.

Oyo is among the few startups creating a global brand from India. Zomato, Ola and Practo are some of the others that have expanded into international markets in the last few years.

Zomato’s rapid international expansion turned out to be expensive for the company as it ended up rolling back operations in about nine countries.

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This article was first published on livemint.com

Singapore Reporter/s

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

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  • 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. 
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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.