India: Oyo raises $1b from SoftBank, Sequoia, others for global expansion

Ritesh Agarwal. Photographer: Samyukta Lakshmi/Bloomberg

India’s homegrown startup Oyo, which operates a network of budget hotels, on Tuesday said it is raising $1 billion from existing investors including Japan’s SoftBank Group and others as it aggressively looks to expand in India and China, and foray 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. All have together pumped in $800 million in the latest round, with commitments for another $200 million, valuing the Indian startup at about $5 billion.

Of the total funds raised, about $600 million alone would be invested in China where Oyo began operations only 10 months ago, said Bloomberg in its report quoting sources.

“In the last 12 months, we have increased our international footprint by entering in China, Malaysia, and Nepal, and more recently in the UK. With this additional funding, we plan to rapidly scale our business in these countries, while continuing to invest further in technology and talent,” Oyo founder Ritesh Agarwal said.

“We will also deploy fresh capital to take our unique model that enables small hotel owners to create quality living spaces, global.”

Oyo, which is owned and operated by Oravel Stays Pvt. Ltd, started with one hotel in Gurgaon and has grown to 125,000 rooms in India. The chain has expanded to 171 cities with 87,000 rooms in China, which was its third overseas market after successfully venturing into Malaysia and Nepal.

In July, the Indian startup also reportedly entered London, and was looking to set up business in Indonesia, in others parts of the UK and Europe over the next 12 to 18 months. Globally, it is now present in over 350 cities with a capacity of 211,000 rooms.

Oyo’s network includes major metros, regional business hubs, top leisure destinations as well as pilgrimage towns. Through the use of its proprietary apps for inventory-management, room-service, revenue-management and customer-relationship management, OYO claims to deliver predictable, affordable and available budget-room accommodation to millions of travellers.

Founded in 2013, Oyo has raised nearly $1.5 billion in funding to date. In September last year, Oyo raised $250 million in a Series D round led by SoftBank Vision Fund. Sunil Munjal-led Hero Enterprise, Sequoia India, Lightspeed Venture Partners and Greenoaks Capital also participated in that round.

At a $5 billion valuation, Oyo has reportedly become India’s most-valuable startup after One97 Communications, the parent of digital payments firm Paytm. Oyo, which competes with the likes of Fabhotels and Treebo, is among the few startups creating a global brand from India. Zomato, Ola and Practo are some of the others, which have expanded into international markets in the last few years.

“We will continue to explore newer businesses while remaining focused on both organic and inorganic growth,” Agarwal added.

Last week, OYO also said it plans to hire over 2,000 technology experts and engineers by 2020.

“With another 2,020 experts joining us by 2020, we will continue to invest in technologies like artificial intelligence, machine learning, and IoT, that will make curated guest experiences at every price point a reality, while ensuring sustainable incomes for partners and livelihood opportunities for several Indians,” Agarwal had said.

Oravel Stay’s Pvt Ltd currently employs 700 technology professionals who have developed over 20 in-house products for the hospitality chain. Oyo has an employee base of about 2,900 employees.

 

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.

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.