India-based short-term accommodation platform operator Oyo has secured $100m from ride sharing service Didi Chuxing to close its latest funding round at $1bn, the Economic Times reported yesterday.
Didi Chuxing conducted the deal through its Star Virtue Investment unit. The capital injection marks the final close of a $1bn round led by Vision Fund, which is managed by telecommunications and internet conglomerate SoftBank, that valued it at $5bn.
Vision Fund supplied an initial $800m for Oyo in September 2018 alongside venture capital firms Sequoia Capital and Lightspeed Venture Partners, before ride hailing service Grab added $104m in December.
Oyo partners existing hotels to create branded, standardised budget rooms that offer amenities such as free wifi and LED television.
The company operates more than 8,500 rooms across 500 cities in India, Nepal, China, Indonesia, Malaysia and the United Arab Emirates, and has also created a home rental platform called Oyo Living.
Didi Chuxing’s investment is expected to support Oyo’s operations in India and China, with $600m of the total set to go to activities in the Chinese market.
The companies are thought to be seeking a deeper partnership to drive further international expansion efforts by Oyo, which is rumoured to be seeking an entry into the US market.
Oyo’s Chinese subsidiary, Oyo China, will reportedly also receive strong support from SoftBank Vision Fund, which now owns a 42% stake in the company, as well as Sequoia and Lightspeed.
Oyo has now raised $1.45bn altogether. SoftBank first led its $100m series B round in 2015, investing alongside Lightspeed, Sequoia Capital India and investment firm Greenoaks Capital. The latter three were earlier investors, as were DSG Consumer Growth and Venture Nursery.
SoftBank returned in 2016 to supply a further $62m, before Vision Fund led a $250m round featuring insurance and aerospace component supplier Hero Enterprise, Lightspeed, Sequoia and Greenoaks in September 2017. Hotel management firm China Lodging Group added $10m the same month.
