The capital received through the forthcoming primary round will help boost OYO’s expansion plan in India, US, China, UK, EU, and Southeast Asia markets. OYO is increasingly evolving into a real estate service platform with 1 million-plus rooms under its management, globally.
Ankur Pahwa, partner and national leader, e-commerce and consumer internet at EY India, said that a move like this served a couple of purposes in a single stroke. This includes providing the entrepreneur greater shareholding and rights of the company and enabling him or her to capture greater gains as the firm achieves scale and success. “It also provides early investors an exit opportunity with substantial gains having reaped the fruits of their early commitment with capital to the company,” said Pahwa. “These structures with similar construct and differential voting right instruments are certainly going to be used (by other Indian) fast growing companies
as well,” said Pahwa.
OYO said this year it has seen a 4.4x year-on-year growth in revenue in June 2019 (vs June 2018), with 1 million rooms under management across hotels and homes; with over 200,000 rooms in India.
The firm continues to bring its model of combining design, hospitality, and technological expertise to real estate owners around the world. This enables the firm to get a higher return on investments and transform their hotels, thereby significantly increasing occupancy and profitability – in every OYO building. There are over 20,000 of these buildings worldwide.
OYO has attracted marquee investors, including accommodation platform Airbnb, SoftBank Vision Fund, Lightspeed Venture Partners, Greenoaks Capital, Sequoia India, and Hero Enterprise.
“We have confidence in Ritesh’s (Agarwal) vision for OYO and how the team has come together to build a truly global brand from India. It has been an exciting journey so far and we hope to achieve many more milestones together in the time to come,” said Munish Varma, managing partner, SoftBank Vision Fund.
In June this year, SoftBank Group Corp founder Masayoshi Son said he was expecting OYO to become the largest hotel network in the world. At a general shareholders' meeting in Tokyo, Son had said that OYO was one of the largest hotel networks in India and had become the second biggest hotel network in China in just one year. The company is growing its market worldwide in regions such as the US, UK and Southeast Asia.
“As the company’s first institutional investor, Lightspeed is fortunate to have been part of OYO’s journey from a fledgling start-up in India to a transformative company in the hospitality industry globally,” said Bejul Somaia, partner, Lightspeed India Partners Advisors. “We remain committed to supporting Ritesh and the OYO team as the company embarks on its next phase of growth globally,” he added.
OYO Hotels & Homes said it is the world’s third-largest chain of hotels, homes, managed living and workspaces. The portfolio combines fully operated real estate comprising of more than 23,000 hotels and 46,000 vacation homes. OYO along with Vacation Homes categories managed by the company under OYO Homes, Belvilla and Dancenter brands can be found in more than 800 cities in 80 countries. These include markets such as the U.S., Europe, India, Malaysia, Middle East, Indonesia, Philippines, and Japan.
“This is the kind of stuff start-ups and ventures investing dreams are made of,” said Mohit Bhatnagar, managing director, Sequoia Capital India Advisors. “We remain committed to supporting this world-class management team as they continue to create living spaces across the world.”