Hotel aggregator OYO Rooms has raised $250 million from its existing investor SoftBank, with new investor Hero Enterprise also coming on board.
The latest transaction has also seen participation from Gurgaon-headquartered company’s existing group of investor which includes, Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital. Also joining the company’s investor cap table is Hero Enterprise, the Sunil Munjal.
Commenting on the development, Sunil Kant Munjal, Chairman, Hero Enterprise, said:
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.
Launched in 2013, OYO is India’s largest branded network of hotels. The company claims to have its network currently spans over 200 Indian cities including all major metros, regional commercial hubs, leisure destinations, and key pilgrimage towns. The company’s vision is to become the most preferred and trusted hotel brand in the world.
The Japanese telecom and internet conglomerate, SoftBank, has invested through its $100 billion SoftBank Vision Fund, making this the second major bet placed by the world’s largest pool of private capital in India over the course of the last two months.
As per the sources, a significant portion of the proceeds of the latest round of funding will be used by the company in expanding their presence outside India. The south-east Asian region is likely to be the first geography where OYO will look to further expand and then deepen its footprints.
OYO, which currently claims to operate 8,500 hotels and 70,000 rooms in more than 230 cities across the country, had raised $90-million funding round, split into two tranches, led by its largest shareholder SoftBank in August 2016.
Notably, Venture Nursery has cashed out of the startup amid differences which cropped up between the startup accelerator and the OYO in 2015. Venture Nursery held around 2% stake in OYO, which it has exited netting Rs 60 crore in a secondary sale of shares. It had put Rs 2530 lakh in the startup’s first avatar Oravel Stays -an Airbnb clone -between 2012-13.
The firm competes with the likes of Nasdaq-listed online travel operators MakeMyTrip and Yatra, as well as Treebo Hotels and Fab Hotels that have all raised significant amounts of risk capital in 2017.
Prior to this, OYO raised $100 million of funding in April 2016 from SoftBank only. Its other investors include Sequoia Capital, Greenoaks Capital, and Lightspeed Venture Capital, among others. OYO got its first round of funding from Venture Nursery, a Mumbai-based startup accelerator, in December 2012.