Indian budget hotel startup OYO Rooms that is commonly known as OYO has raised $1 billion in its latest funding round at reported valuation of $5 billion, making it one of the most valuable Indian startups. The $800 million of the investment was led by Saudi and UAE backed SoftBank’s Vision Fund with participation from Lightspeed Venture Partners, Sequoia and Greenoaks Capital. The rest of $200 million has been committed by some undisclosed investors.
Founded by Ritesh Agarwal in 2013 – who was only 19 back then, OYO is a hotel aggregator that partners with the independent and small hotel owners to work with them on standardizing rooms and services with some basics including clean sheets and WiFi to sell the OYO-branded rooms through its website, mobile apps, and partners.
The company claims to have over 10,000 franchised or leased hotels in its network across five countries including India, China, Malaysia, Nepal, and England. They have over 125,000 rooms in India and 87,000 rooms in China – where they expanded only ten months ago. For England, OYO plans to have 300 hotels in its network before 2020.
OYO aims to use the majority of these funds, approximately $600 million to strengthen its position in China. The company has also its eyes on Southeast Asia and Middle East.
“Markets such as Southeast Asia and the Middle East, which have a large volume of unbranded hotels, offer the budget accommodation provider the potential to expand,” said OYO’s founder and Chief Executive Officer Ritesh Agarwal said, speaking to Reuters.
They had expanded to UAE earlier this year with the appointment of a former Souq executive as Head of Middle East Business, and currently have ten Dubai properties listed on their website.
“While we will double down on our investment in home markets, we will open new geographies in the future. We have a very large opportunity worldwide,” he added.