OYO ROOMS ACQUIRES RIVAL ZO ROOMS
In a sign of consolidation in the branded rooms aggregation space, Oyo Rooms has acquired rival Zo Rooms. Oyo’s lead investor, Japanese telecom and internet firm Softbank, in its annual report for 2015 has confirmed the acquisition.
Since December, media has been speculating about an impending deal. Zo has been struggling to raise funds after its last round in August from Tiger Global and Orios Venture Partners.
Zo has a network of 11,000 rooms in 1,000 hotels across more than 50 cities in India. Dharamveer Singh Chouhan, co-founder & CEO of Zo Rooms, feigned ignorance about the deal when TOI got in touch with him. Oyo executives were also not available for comment.
Market leader Oyo, founded in 2012 by Ritesh Agarwal when he was just 18, and which has raised $125 million from a host of investors including Softbank, Sequoia Capital, Lightspeed Ventures and DSG, will now have a massive network of hotels — a scale that no traditional hotel group comes anywhere close to. It has operations in 173 cities with more than 4,500 hotels offering 40,000 rooms on the platform.
Zo Rooms, which had raised $47 million from its investors, was run by Zostel Hospitality, which provides backpacker’s with hostel accommodation in several cities. There are still several others in the space, including Vista Rooms, ZipRoom and WudStay, that are creating a network of branded hotels much like Taj, ITC, Hilton, Marriott and Inter-Continental did decades ago in the premium segment.