Hotel aggregator OYO Rooms on Thursday said that it has raised its largest ever funding round of $250 million (Rs 1,600 crore) through Series D led by Japanese internet and telecom conglomerate SoftBank and Sunil Kant Munjal-led Hero Enterprise. Existing investors Sequoia India, Lightspeed Venture Partners and Greenoaks Capital also participated in the current round. SoftBank will make the investment from its $100-billion corpus Vision Fund. The current round of investment further corroborates the fact that SoftBank is increasingly betting on India’s e-commerce market. Just last month, SoftBank’s Vision Fund announced a $2.5-billion investment in India’s home-grown e-commerce firm, Flipkart.
OYO’s last round of funding in April 2016 of $200 million was also led by SoftBank. This latest funding also gives OYO the heft to battle against players like Makemytrip, Yatra and others in a space that is increasingly witnessing consolidation. With this new round of funding, the company plans to expand its presence in the Southeast Asian region, which will make it one of the few Indian internet start-ups like Byju’s and Zomato to go global.
OYO Rooms recently claimed in a blog post that its losses fell to Rs 325 crore in the year ended March 2017, without disclosing revenue figure for the same period.
Ritesh Agarwal, founder and CEO, OYO, said, “We are now focusing on further accelerating network coverage to consolidate our leadership in economy through OYO rooms and mid-market category through Townhouse brands. We will also deploy fresh capital to take our made-in-India business model to international markets which are characterised by a similar supply-demand imbalance in real-estate and hospitality.”
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 is also present in Malaysia and Nepal. It employs over 2,500 people.
Hero Enterprise chairman Munjal said, “As a business family, we have always set new paradigms. So OYO’s unique business model excites us. The differentiated thinking and ingenuity that Ritesh and his team bring to this industry gives us confidence that OYO can scale, innovate and set new benchmarks in customer experience. We are delighted to join other marquee investors in OYO’s exciting journey towards becoming a global brand.”
Agarwal added, “We are developing capabilities to add 10,000 rooms to our network each month. Over 95% of OYO’s demand comes through our own channels with no commissions to pay, and the business has a solid growth outlook. The fresh capital infusion will support our organic expansion to newer markets in India and abroad. It will also enable us to bring additional resources to accelerate enhancement of customer experience and strengthen our technology stack.”