Date
23 April 2019
Ahead of its IPO, Airbnb is reportedly eyeing Oyo, a hotel management startup that is touted as 
India’s largest hospitality company. Photo: Reuters
Ahead of its IPO, Airbnb is reportedly eyeing Oyo, a hotel management startup that is touted as India’s largest hospitality company. Photo: Reuters

Airbnb in talks to invest in Indian hotel startup Oyo: report

Home-rental giant Airbnb is in talks to invest in Indian budget hotel management startup Oyo Hotels, tech media company The Information reports, citing sources familiar with the matter.

If it materializes, the deal would be another major acquisition by Airbnb before its long-expected initial public offering some time this year. Earlier this month, it announced that it was acquiring last-minute hotel booking app HotelTonight.

The Oyo investment is likely to be in the US$100-200 million range, according to the report.

Founded in 2013, the fast-growing hotel management firm operates a network of budget hotels in over 500 cities and 10 countries such as India, Malaysia, China, and Nepal, and has over 8,500 properties.

By enabling standardization of services, amenities, and in-room experience, Oyo aims to be a major player in the fragmented budget hospitality space in multiple markets.

While Oyo has a growing footprint in Asian emerging markets, mainly Indian and China, Airbnb has a relatively small presence in both markets, making the proposed investment particularly interesting for the San Francisco-based home-rental company.

Airbnb co-founder and chief strategy officer Nathan Blecharczyk told Indian media PTI that business travel is a focus for the company in India.

He said about 6,500 companies in the country have signed with the platform for business travel. “There is a lot of traction here,” Blecharczyk said.

In a separate interview with Mint, Blecharczyk spoke of the huge prospects of domestic travel in India.  “Out of the total addressable market of India, three-fourths is domestic travel. Our trend is heading in that direction,” he said.

Touted as India’s largest hospitality company, Oyo Hotels has raised about US$1.7 billion since its founding, and has been backed by heavyweight investors such as Japanese mega tech fund SoftBank Vision Fund, Sequoia Capital, Lightspeed Venture Partners, China ride-hailing giant Didi Chuxing and its Southeast Asia peer Grab.

Softbank is currently Oyo’s largest shareholder, leading its Series B, Series C and Series D funding rounds. It also led a US$1 billion investment in the company in Series E last September, according to data from Crunchbase.

In June last year, The Times of India reported that Chinese internet giant Tencent Holdings (00700.HK) had held discussions with Oyo in a bid to lead a financing round of up to US$500 million in the startup.

Aside from buying HotelTonight for an estimated US$400 million, Airbnb also agreed in January to acquire Denmark’s Gaest, an online marketplace designed to help meeting and event planners find inspiring spaces for short-term rentals.

In December last year, Airbnb acquired French property management startup Luckey Homes and participated in a a US$75 million Series C in female-focused co-working space The Wing.

Oyo currently markets its rooms through Airbnb competitors such as Booking.com, TripAdvisor and Agoda. It is unclear whether Airbnb will gain exclusive access to Oyo’s inventory if the proposed investment materializes, The Information said.

– Contact us at [email protected]

BN/CG

EJI Weekly Newsletter

Please click here to unsubscribe