In its second major funding round in a single day, Softbank has now led a staggering $100 Million round into budget hotel rooms provider Oyo Rooms. Existing investors Lightspeed Venture Partners, Sequoia Capital India and Greenoaks Capital also participated in this investment round.
This round becomes all the more important, as it gives Oyo a massive monetary edge over rival Zo Rooms, which recently grabbed a speculated $15 Million round led by Tiger Global.
The 21-year old founder of Oyo Rooms, Ritesh Agarwal said,
The reason why we chose SoftBank was their ability to back early leaders and make them dominant leaders forever.
Post this funding, Oyo Rooms aims to build a 50,000 hotel network spanning across 100 cities by the end of this year (that target has multiplied 5 times since its last funding round). And while that may be the year-end plan, a long term two-year plan for Ritesh, is to build a gargantuan 500,000 hotel network in over 250 cities across the country.
Oyo’s model, unique in itself, caught immediate attention of budding travellers. The startup partners with a select set of local hotels, and refurbishes their rooms with modern amenities like Wi-fi, Air conditioning etc. As per multiple reports, the company spends anywhere in between 10,000-20,000 to update a particular room. In another model, Oyo Rooms also ties up with hotel owners, to support the refurbishment costs.
Talking about his company’s expansion plans, Agarwal said,
While we see growth in bigger cities getting faster and stronger, tier-II market will also become big. We believe this is just Day 1.
On investor front though, they have been left surprised and struck, largely by Oyo’s rapid growth. The company, which started with a mere 4 properties in Gurgaon, now has a network spanning over 40 cities.
Oyo Rooms had earlier raised a $24 Million round led by LightSpeed India and GreenOaks Capital.