Oyo raises $250 mn in financing; Hero Enterprise joins as a new investor
Hospitality company Oyo has raised $250 million (Rs 1,600 crore) in a Series D financing round led by SoftBank through SoftBank Vision Fund with participation from existing investors Sequoia India, Lightspeed Venture Partners and Greenoaks Capital. Hero Enterprise has also joined the round as a new investor.
Speaking on the development, Ritesh Agarwal, Founder & CEO, Oyo, said, “In less than four years, Oyo has become India’s largest hospitality company in terms of network presence and inventory. Travellers and city-dwellers alike have embraced our offering of hassle-free and affordable stay accommodation, available anytime anywhere, at the touch of a button. 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.”
Justin Wilson, SoftBank’s Board representative on Oyo, remarked, “Oyo has solidified its position in India as the leading accommodation brand for consumer affordability and high quality standards. We are excited to continue to support Oyo as they further expand their position in India and bring the Oyo promise of affordability and elevated hospitality to other markets around the world.”
Sunil Kant Munjal, Chairman, Hero Enterprise, added here, “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.”
Sharing more details on the growth strategy, Ritesh Agarwal elaborated, “The deal reinforces investor confidence in our unique business model and our view of the hospitality and short-stays opportunity in India. Our teams have developed industry-leading expertise undertaking the world’s fastest hotel transformations. We are developing capabilities to add 10,000 rooms to our network each month. Over 95 per cent of Agarwal’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.”
Launched in May 2013, Agarwal pioneered the use of technology in budget-hotel operations in India. It standardised hotel rooms across the country, making them available for booking via app, web, call centre and channel partners. Agarwal apps enable faster, convenient and delightful experience for customers and hoteliers. Agarwal operates through Agarwal Rooms – the economy brand in the marketplace model and Townhouse – a managed hotel brand that combines experience and value for mid-market customers. Guests of both brands are served by Agarwal Captains – local concierge staff for providing personalised on-ground assistance.