Airbnb has invested $150-200 million in hospitality chain Oyo Hotels & Homes, making it the third successive strategic investor to buy a stake in the Gurgaon-based company. As part of the deal, Oyo is also likely to list its properties on the San Francisco-headquartered company’s platform. This is as per a report in the Economic Times.
The funding valued the Indian company at a little over $5 billion, according to people aware of the details of the transaction. Oyo has mopped up nearly $1.2 billion in fresh capital in this round.
Airbnb’s investment — a part of Oyo’s Series E equity financing round that began in September 2018 — also highlights the US company’s attempts to push deeper into Asia’s third-largest economy, and involve into an end-to-end travel services platform. Oyo confirmed the transaction.
“Airbnb’s strong global footprints and access to local communities will open up new opportunities for Oyo Hotels & Homes to strengthen and grow,” Maninder Gulati, global chief strategy officer at Oyo Hotels & Homes, said in a statement.
The investment is expected to be mutually beneficial for both companies. For Airbnb, listing Oyo’s rooms under management will significantly boost its inventory in a market where it is yet to make a big impact. On the other hand, the listings on Airbnb will allow SoftBank-backed Oyo to expand more rapidly in newer geographies given the company’s global plans.
“Both parties are exploring opportunities to collaborate on a range of projects, including making Oyo accommodations available on the Airbnb platform,” said an Oyo official on condition of anonymity.
Airbnb is estimated to have about 45,000 listings on its platform in India. Its co-founder Nathan Blecharczyk had told ET during his visit to India in February that the country was among the five fastest-growing markets for the company globally.
Oyo, according to company data, is currently present in over 259 cities In India with 8,700-plus buildings and manages over 173,000 rooms under its brand. In China, which Oyo considers as its second home market, subsidiary Oyo Jiudian is present in 280 cities, operating more than 5,000 hotels and 260,000 rooms as of January this year. It runs a mix of franchised and leased properties in the country.
As part of its mega funding round, Oyo had earlier brought on board Chinese ride-hailing major Didi Chuxing and Singapore-based Grab with the two investing $100 million apiece in the Indian startup.
The Series E round has already seen SoftBank, the world’s largest technology investor, leading an $800 million capital infusion into the company, with Oyo’s other existing investors — Lightspeed Ventures, Sequoia Capital and Greenoaks Capital — also participating.
The six-year-old company has now raised around $1.5 billion across rounds.
The Airbnb investment comes a little over three months after Oyo group chief executive Ritesh Agarwal, in an internal email to employees, said that the company was well-capitalised, and did not have any plans of raising further funds. It is now unclear if the company has closed the round, or is expected to continue onboarding new investors.
According to a report by Bloomberg, Airbnb, which was last valued at $31 billion, has been focusing on evolving into an end-to-end travel platform. The company, which is also slated to go public, has more than doubled the number of rooms available in properties categorised as boutique hotels, bed-and-breakfasts, and other hospitality venues like hostels and resorts, the report said.