Indian budget hotel pioneer OYO Raises $250 mln to add 10,000 rooms each month
Budget- hotel chain OYO on Thursday announced a INR1,600 crore (US$250 million) Series D funding round led by SoftBank through SoftBank Vision Fund. Japanese giant SoftBank is keeping its faith in India’s budget accommodation provider Oyo, despite its mounting losses and growing competition.
Existing investors Sequoia India, Lightspeed Venture Partners, and Greenoaks Capital participated in the round, while Sunil Kant Munjal-led Hero Enterprise joined in as a new investor.
The company will use the funds to expand its presence to Southeast Asia, strengthen its team and enhance its technology backbone.
Founder Ritesh Agarwal said “We are now focusing on further accelerating network coverage to consolidate our leadership in an 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 characterized by a similar supply-demand imbalance in real-estate and hospitality”.
"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," said Sunil Kant Munjal, chairman, Hero Enterprise.
CEO Ritesh 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.”
According to a press statement, the company plans to expand its presence in the Southeast Asian region, which will make it one of the few Indian internet startups like Byju’s and Zomato to go global.