26 September 2018_campuscad
Five year old startup, OYO which deals into budget hotel booking raised more than $800 million from Softbank’s vision fund and $200 million from undisclosed investors. Existing investors Lightspeed Venture Partners, Sequoia and Greenoaks Capital also participated in the round.
Ritesh Agarwal, the 24 year young founder and CEO of the OYO said, “We will continue to explore newer businesses while remaining focused on both organic and inorganic growth. In the last 12 months, we have increased our international footprint to five countries. With this additional funding, we plan to rapidly scale our business in these countries, while continuing to invest further in technology and talent.
We will also deploy fresh capital to take our unique model that enables small hotel owners to create quality living spaces, global.
Currently OYO operates in India, China, Malaysia, Britain and Nepal. OYO is having more than 125,000 rooms listed on its platform in India and 87,000 in China which is growing rapidly and wants to invest $600 million into the Chinese hospitality market. OYO at present operates in more than 350 cities in 5 countries.
OYO story in 1 minute
OYO started as a standard budget hotel listing service in Gurgoan with 1 hotel by Ritesh Agarwal at the age of 19 in 2013. After travelling multiple Indian cities, he discovered crazily unpredictable standards and services by unbranded hotels and decided to start the Budget hotel service with free Wi-Fi, Clean sheets and hot showers to customers under OYO brand. Company first raised more than $100 million from Softbank to expand into Indian market.
OYO budget service then hit by fraud service bookings, irregular cancellations and unpleasant hotel environments. So OYO decided to work with hotels to improve the living standards of the hotel rooms. OYO’s guidelines includes thickness of the sheet to location of the switches, clean linen, height of showers and OYO sign board on the front of the hotel and need to maintain the same.
OYO also started its own hotel brand called Townhouse to improve its image with customers by providing branded budget hotel experience and it is completely managed by OYO staff only.
OYO receive 25% commission on the hotel booking through its platform.
Current funding makes OYO’s valuation to $5 billion with second most valuable startup after Paytm (Paytm raised INR2500 Crore from Berkshire Hathaway in August 2018 ) and other hotel brands like Indian Hotels (Taj) brand which is valued at $2.05 billion and Oberoi at $1.2 billion.