OYO Hotels to invest $100m in Indonesia

OYO has a deep war chest, having raised $1.7 billion from SoftBank Group, Sequoia Capital, Lightspeed Venture Partners, Airbnb, Grab and Didi …

JAKARTA — Indian budget hotel chain OYO Hotels and Homes said it is planning to invest $100 million in Indonesia, or half of the total amount earmarked for Southeast Asia, to strengthen its presence there within the next two years.

Indonesia is key to OYO’s growth in Southeast Asia and globally, said founder and group CEO Ritesh Agarwal in a statement.

In less than a year of operating in the country, OYO has partnered with over 1,000 hotels to offer 27,000 rooms in 100 cities, beating its own initial target of reaching that number by the end of this year. More than 1,200 hotel owners have also joined OYO’s network.

On Wednesday, OYO launched its Partner Engagement Network, an initiative to help its partners in Indonesia reach their business goals. The program consists of four core commitments which include transparent payment protocols, access to financing options for partners through banks and other financial institutions, marketing support, as well as technology and innovation support.

With its young population and growing economy, Southeast Asia is a hot market for budget travel and accommodation. OYO’s plans in the region is a headache for its smaller peers like ZEN Rooms and Reddoorz.

OYO has a deep war chest, having raised $1.7 billion from SoftBank Group, Sequoia Capital, Lightspeed Venture Partners, Airbnb, Grab and Didi Chuxing, according to Crunchbase. By contrast, ZEN Rooms has raised a total of only $23 million and RedDoorz $69.4 million.

OYO took its first step in Southeast Asia via Malaysia in January 2016. In July this year, the chain launched in Vietnam where it is planning to invest $50 million. OYO claims to already have over 90 hotel partners in six major cities in Vietnam. It aims to become the largest hotel chain there by the end of 2020 with presence in 10 cities offering 20,000 rooms.

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OYO said to commit USD 100 million investment in Indonesia to boost its growth

OYO has raised USD 1.7 billion from SoftBank Group, Sequoia Capital, Lightspeed Venture Partners, Airbnb, Grab and Didi Chuxing, according to …

Indian budget hotel chain OYO Hotels & Homes said it earmarked USD 100 million to be invested in Indonesia to strengthen its presence in the country. This represents half of OYO’s intended USD 200 million investment in Southeast Asia that will be channeled within the next two years.

Indonesia is the key to OYO’s growth in Southeast Asia and globally, according to Ritesh Agarwal, the firm’s founder and group CEO, as quoted in an official statement.

In less than one year of operating in the country, OYO claims to have partnered with over 1,000 hotels and 27,000 rooms in 100 cities. Moreover, there are 1,200 hotel owners who have joined the OYO’s network. According to the firm, it is ahead of its initial plan to expand into 100 cities by the end of this year.

The company launched its OYO Partner Engagement Network yesterday, an initiative for its partners in Indonesia to reach their business goals. The program consists of four core commitments which include transparent payment protocols, access to financing options for partners through banks and other financial institutions, marketing support, as well as technology and innovation support.

With its young population and growing economy, Southeast Asia is a hot market for budget travel and accommodation where OYO is challenging incumbents like ZEN Rooms and Reddoorz.

OYO has raised USD 1.7 billion from SoftBank Group, Sequoia Capital, Lightspeed Venture Partners, Airbnb, Grab and Didi Chuxing, according to Crunchbase. Meanwhile, ZEN Rooms raised a total of USD 23 million and RedDoorz raised USD 69.4 million. The total capital of both companies only makes up 5% of OYO’s, granted the latter is spreading its funds across a global operation.

OYO took its first step in Southeast Asia via Malaysia in January 2016. Most recently, the chain officially launched in Vietnam in July 2019, rolling out potentially a USD 50 million investment in the country. OYO claimed to have already over 90 hotel partners across six major cities in Vietnam and it aims to become the largest hotel chain in the country by the end of 2020 with presence in 10 cities and 20,000 rooms.

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OYO acquires Copenhagen-based data science company Danamica

The company is backed by investors including SoftBank Group, Lightspeed India, Sequoia Capital, Greenoaks Capital and China Lodging Group, …

OYO Hotels & Homes has acquired Danamica, a Copenhagen-based data science company which specialises in dynamic pricing, the Indian company said in a statement.

OYO, operated by Oravel Stays Pvt. Ltd, said the acquisition would help it drive its top-line growth by leveraging Danamica’s dynamic pricing capabilities across all its brands. The move is also in line with its global vacation rentals strategy, and the company is committed to spend €300 million (around $328.15 million or Rs 2,373.83 crore) in the vacation homes business in Europe, the firm said.

The financial details of the deal could not be ascertained, but TechCrunch reported that OYO had paid $10 million (approximately Rs 72.25 crore at current exchange rates) for the Danamica ApS-operated firm.

The acquisition comes around after the company acquired a majority stake in European vacation rental company @Leisure Group from German media house Axel Springer SE in May.

Founded in 2013 by Ritesh Agarwal, Oyo operates more than 18,000 franchised and leased hotels in more than 500 cities across 10 countries including India, China, Malaysia, the UK, the UAE and Indonesia.

The company is backed by investors including SoftBank Group, Lightspeed India, Sequoia Capital, Greenoaks Capital and China Lodging Group, among others.

In July, Agarwal said he would deploy $2 billion (around Rs 13,763 crore) to boost his stake in the hospitality platform via buyback of shares and purchase of fresh equity. As part of the programme, early investors Lightspeed Venture Partners and Sequoia Capital India said they would sell part of their shareholdings in OYO.

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Oyo acquires Las Vegas’ Hooters hotel & casino

Valued at over US$10 billion, Oyo has become one India’s most sought after startup attracting marquee investors such as Sequoia Capital, Lightspeed …

Leading hospitality and hotel aggregator Oyo Hotels has announced that it has acquired the Hooters Casino Hotel in Las Vegas, in a deal estimated to valued at around US$ 135 million.

The 657 room hotel and 35,000 square feet casino will now be rebranded as Oyo Hotel & Casino, Las Vegas.

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Hospitality investment firm Highgate will manage the hotel while Paragon Gaming will continue to manage the casino operations, Oyo said in a statement.

The casino resort’s acquisition, a first by an Indian startup in America’s casino capital, is part of Oyo’s strategy to go for global expansion after becoming India’s largest hotel chain with over 173,000 rooms under its management.

“We believe Las Vegas is an exciting city in which to invest as the market continues to evolve with projects such as the new Las Vegas Raiders NFL stadium and the $1 billion expansion of the Las Vegas Convention Center. As we continue to focus on bringing to life our popular concept of ‘comfort design’ and delivering chic hospitality experiences, we are increasingly exploring new ways to connect with our customers, from millennials, to young executives and families, in every city we enter,” said Abhinav Sinha, chief operating officer and OYO Hotels and Homes USA.

“With our newest hotel in Las Vegas, we are excited to cater to a completely different audience segment,” said Ritesh Agarwal, founder and chief executive, OYO Hotels and Homes.

Valued at over US$10 billion, Oyo has become one India’s most sought after startup attracting marquee investors such as Sequoia Capital, Lightspeed Ventures, Airbnb and SoftBank Group.

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With Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global Role

As a part of these transactions, Lightspeed Venture Partners and Sequoia India, had sold a part of their shareholding in OYO to help Agarwal increase …
With Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global RoleWith Eyes On Global Market, OYO’s Ritesh Agarwal To Take A Global Role

Image Courtesy: TechInAsia

Founder of the Indian hospitality unicorn OYO Hotels and Homes, Ritesh Agarwal will reportedly take up a larger role in the company’s Singapore office as the company plans to establish itself as a global player.

“My deeper engagement in the global business is a natural progression given our continued growth over the last couple of years and the opportunities in the US, Europe, China, and Southeast Asia,” Riteshreportedly said. This move is said to be a part of the ongoing structural changes in OYO for the past 12 months as the company continues expanding its global operations.

Since its launch six years ago, OYO has moved from a hotel aggregator to a franchisee model. The company has expanded its services tomore than 800 cities in 74 countries, including the US, Europe, UK, India, Malaysia, Middle East, Indonesia, Philippines, and Japan. Last week, OYO has also announced its expansion to Las Vegas in the US in partnership with Highgate.

Also last month, the company segmented its business under two entities separately handling Indian hotel business, and international and technology business. This was closely followed by Agarwal, through RA Hospitality Holdings (Cayman), signing a$2 Bn primary and secondary management investment round, supported by global institutional banks and his financial partners, subject to regulatory and shareholder approvals.

As a part of these transactions, Lightspeed Venture Partners and Sequoia India, had sold a part of their shareholding in OYO to help Agarwal increase his stake while remaining invested and committed to the company’s long-term mission.

Agarwal also reportedly added, “these international plans do not change his continued commitment to India, one of our key home markets, which continues to grow. I will continue to be on the board of Oyo’s global parent entity — Oravel Stays.”

Balance Sheet Of Over $1.5 Bn Without Profits

OYO reportedly claims to have a strong balance sheet with over $1.5 Bn, and has seen a 4.4x YOY growth in revenue in June 2019. OYO has raised $1.7 Bn of funding from investors such as Airbnb, SoftBank Vision Fund, Greenoak Capital, Sequoia Capital, and Hero Enterprise.

The company is now said to be in talks to raise a fresh roundof $1 Bn funding at a valuation of $10 Bn. This would be almost double its current valuation of $5 Bn.

Talking about profits, Agarwalreportedly said, “Given how we continue to make forward-looking investments in the form of Capex support to our asset owners, developing our technology, onboarding pricing, revenue management, talent acquisition, training and developments at the group level, we are not profitable yet.”

However, he added, “Given our efficient management and economies of scale, we are generally profitable at the unit level, which is unheard of at this early stage in the business.”

Anothermedia report has noted Agarwal saying that the inputs given by SoftBank’s CEO Masayoshi Son have always been transformational for OYO’s business. Giving an example of this, he said, “With Son’s guidance we have learnt the art of taking calculated risks.”

“At a time when we were just operational in India along with an initial footing in Malaysia. I asked Son if we could enter China, and he asked me about our balance sheet, which was $150- $200 Mn. He then went on to suggest that we invest 25% of our balance sheet in China and see if we could make a positive difference there.” he added.

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