OYO currently has around $1.5 billion available to further fuel its growth even as it has scaled rapidly on the back of its success in China with a presence in 337 cities and over 500,000 rooms.
OYO today said that it has become the world’s third largest hotel chain in terms of the number of rooms as of June 2019 within six years of launching the company. The company has expanded to more than 800 cities having nearly 23,000 hotels on its platforms and 850,000 rooms.
OYO currently has around $1.5 billion available to further fuel its growth even as it has scaled rapidly on the back of its success in China with a presence in 337 cities and over 500,000 rooms, the company said in a statement. OYO has a presence in 80 cities with over 20,000 rooms and 720 hotels presence in Indonesia and other regions in Asia.
“OYO has surpassed other hotel brands including IHG, Accor, Wyndham etc. It will spend $300 million out of the $1.5 billion towards the US business,” a source aware of the development told Financial Express Online.
This comes amid reports of Ritesh Agarwal being in talks with the company’s investors Sequoia Capital and Lightspeed Venture Partners to buy back shares and increase his ownership of the startup he founded. “This signals on how confident Agarwal is about the business and the nearing timelines for IPO that is expected after three years. The investors are more likely to have a partial exit,” the source added.
Financial Express Online had reported on Monday that SoftBank might push Sequoia and Lightspeed for a full exit to enhance its stake in OYO provided it has the consent of Ritesh Agarwal, Founder and Group CEO OYO Hotels & Homes after it was restricted to increase its stake beyond 49.99 per cent as per the amended articles of association during 2017 funding.
Its relatively new markets such as the UK has OYO in its 25 destinations with 85 hotels and in 40 cities with over 68 hotels in the US. Another major push for OYO’s growth has been the recent acquisition of Europe’s vacation rental group @Leisure that gave OYO direct and instant access to @Leisure Group’s 1.15 lakh units of homes — over 13X growth for OYO in homes segment in the European market.
“The company has streamlined its business with entire Indian operation across its various product categories being clubbed into one company while the international foray with its own challenges and nature of operations will be the second unit. The technology and brand-related activities will be managed by a third company,” the source claimed.
“Today, OYO has over 850,000 exclusive keys as part of its hotel chain. We started with a simple mission of creating quality living spaces. Over 500,000 heads rest on OYO hotel pillows daily today, a testament to the impact we are creating globally, said Agarwal. OYO is currently a “small percentage of the world’s accommodation market, and we have an incredible opportunity ahead of us.”
Of $1.5 billion, 40 per cent, that is $600 million, is committed to China business out of which $100 million will be invested in customer experience, quality, and system improvements. The remaining amount out of $100 million will be allocated towards further growth, talent development, competency building, and infrastructure development.
The US and Europe are key growth markets with London, and Dallas, amongst others, emerging as top destinations for OYO. In India, the company has 200,000 rooms at 10,000 hotels in 300 cities.