Airbnb’s much speculated investment in Oyo has now been confirmed by the company. While the deal size is not officially put, multiple media reports have pegged the deal to be around $150-$200 Million. This round is outside of Oyo’s just concluded $1 Bn Series E, which was led by Softbank’s Vision Fund. The Series E round also saw investments from South East Asian ride-hailing giant Grab, and its much bigger Chinese counterpart, Didi Chuxing. Other marquee investors in Oyo include Sequoia Capital, Lightspeed Ventures among others.
The investment is more of a strategic one in nature. Oyo, which started initially as more of an Airbnb rival, has since shifted to focus to hospitality management. The company now, apart from just letting you book budget hotels, also looks after the logistics and overall management of its partner properties. It has also more recently ventured into co-working spaces as well, with its multi-million acquisition of YC-backed Innov8.
Oyo has been aggressively expanding globally, and this strategic financial push from Airbnb will help it lend from the latter’s experience of going global. Oyo has already ventured aggressively into both China and the UK. However, with Airbnb on its side, it could well break into the US market as well, making it a truily global company.
For Airbnb, the acquisition marks as one more way to show investors before an imminent IPO, that it has diversified business. Recently, Airbnb also acquired HotelTonight in a bid to spread across more verticals. The company will also be looking to get a larger pie of the Indian market with this Oyo partnership. Oyo has a lot of villas and Airbnb-ish properties listed on its platform, which the latter could take advantage of.
“Emerging markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets. In many of these markets, OYO is empowering local hospitality entrepreneurs to provide more options to more travelers. We share a dedication to offering people more choices when traveling and we’re excited to partner with OYO as we work to make Airbnb for everyone,” said Airbnb’s president of homes, Greg Greeley, in a statement.
“Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes to strengthen and grow while staying true to our core value proposition. We’re excited by the possibilities and committed to bringing benefits to the millions of travelers who can now rely on Airbnb and OYO Hotels & Homes to find a home away from home,” added Maninder Gulati, global chief strategy officer for OYO.
OYO claims to cover over 500,000 rooms across 13,000 hotels and 6,000 homes in eight countries: India, China, Malaysia, Nepal, the U.K, UAE, Indonesia and the Philippines.