San Francisco-based hospitality service company Airbnb is reportedly investing up to $200 million in India-based OYO, according to TechCrunch. Airbnb is likely going public this year and the company has been making some aggressive deals since then. For example, Airbnb acquired Airbnb last month. Founded by Ritesh Agarwal, OYO is an India-based company that helps people book budget hotels and affordable stays.
This deal is in addition to OYO raising $1 billion in Series E funding that was led by the SoftBank Vision Fund. Southeast Asia ride-hailing company Grab put $100 million in that round alone. The Series E round gave OYO a valuation of about $5 billion. Airbnb did not confirm the exact amount, but multiple sources have confirmed that it is somewhere between $150 million and $200 million. So far, OYO has raised more than $1.5 billion in total funding.
Airbnb and OYO have been competitive in the same space over the last few years, but OYO has been moving more towards hospitality management instead of aggregating budget hotels. By acquiring HotelTonight, Airbnb is planning to get into booking across multiple verticals rather unoccupied vacation rentals.
“Emerging markets like India and China are some of Airbnb’s fastest-growing, with our growth increasingly powered by tourism to and from these markets. In many of these markets, OYO is empowering local hospitality entrepreneurs to provide more options to more travelers. We share a dedication to offering people more choices when traveling and we’re excited to partner with OYO as we work to make Airbnb for everyone,” said Airbnb’s president of homes Greg Greeley in a statement.
Going forward, OYO and Airbnb are going to find new ways to collaborate. There may be potential for OYO properties to appear in Airbnb listings. This would enable OYO to especially to gain revenue from overseas travelers. Last year, OYO expanded its branded network of hotels to the U.K. and the deal with Airbnb could accelerate expansion to the U.S. OYO currently covers about 500,000 rooms across 13,000 hotels and 6,000 homes in eight countries including India, China, Malaysia, Indonesia, Nepal, U.K., and the Philippines.
“Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes to strengthen and grow while staying true to our core value proposition. We’re excited by the possibilities and committed to bringing benefits to the millions of travelers who can now rely on Airbnb and OYO Hotels & Homes to find a home away from home,” added OYO global chief strategy officer Maninder Gulati.
