Ritesh Agarwal-founded hospitality startup OYO has raised ₹519 crores ($75 million) from San Francisco-based home-sharing marketplace Airbnb. The Gurugram-based unicorn has completed the transaction last month, according to its filings with the Ministry of Corporate Affairs.
OYO’s current valuation stands at ₹30,100 crores ($4.3 billion), however, the unicorn claimed valuation of ₹35,000 crores ($5 billion) in September while announcing that Japan-based holding conglomerate SoftBank was leading an investment of ₹7,000 crores ($1 billion).
Both OYO and Airbnb had confirmed an investment as a part of Series E round earlier in March. However, the duo did not disclose the value of the transactions. Several media reports suggested that the investment may be around ₹1,400 crores ($200 million). This closure of Series E round marks oversubscription.
In the future, Airbnb is likely to invest more in OYO depending on how the collaboration goes forward. Airbnb expects to expand its offerings from staple home rentals to an inventory of leased hotels. Airbnb was unable to capture the Indian market due to stiff competition from OYO as OYO earlier aggregated hotel rooms under its brand.
Later, OYO shifted its operations under a franchise model, where it controls the inventory and decides the pricing as well for its exclusive hotel partners. The Indian and Chinese markets are a goldmine for hospitality businesses, according to Greg Greeley, president of homes at Airbnb.
Airbnb currently operates in 191 countries and provides homestays. In February, it launched Plus Homes in India, a ratings-based booking platform for home stays. On the other hand, OYO currently operates in more than 259 Indian cities across 1.75 lakh rooms in 8,700 hotels and homes via a mix of both franchise and lease models.