SoftBank invests $250 mn in Oyo; Hero Enterprise joins as investor
India’s largest budget hotels aggregator, Oyo (Oravel Stays Pvt Ltd), has raised $250 million from SoftBank Vision Fund, in a much needed equity infusion that spells SoftBank’s continued interest in the space and a replenished confidence in the company it entered in 2015.
Hero Enterprise, the investment arm of HeroMoto Corp chairman Sunil Munjal, also joined in as an investor alongside Sequoia India, Lightspeed Venture Partners and Greenoaks Capital.
While the company did not disclose its latest valuation, it is believed to be above the $460 million it was valued after SoftBank invested $62 million in 2016.
“OYO has solidified its position in India as the leading accommodation brand for consumer affordability and high quality standards. We’re excited to continue to support OYO as they expand their position in India and bring the OYO promise of affordability and elevated hospitality to markets around the world,” said Justin Wilson, SoftBank’s board representative at Oyo.
The infusion will give Oyo, which has invested substantial resources into improving service quality levels across properties, significant heft to expand its network and invest in its premium self-managed hotels under the Townhouse brand.
“We are now focusing on further accelerating network coverage to consolidate our leadership in economy through OYO Rooms and mid-market category through Townhouse brands. We will also deploy fresh capital to take our made-in-India business model to international markets which are characterised by a similar supply-demand imbalance in real-estate and hospitality,” Oyo CEO Ritesh Agarwal said.
Munjal, chairman of Hero Enterprises, said: “The differentiated thinking and ingenuity that Ritesh and his team bring to this industry gives us confidence that OYO can scale, innovate and set new benchmarks in customer experience.”