India-based short-term accommodation provider Oyo Rooms is raising $1bn in funding from investors including SoftBank Vision Fund, which is managed by telecommunications conglomerate SoftBank, Bloomberg reported today.
Vision Fund joined venture capital firms Sequoia Capital and Lightspeed Venture Partners for an initial $800m tranche and Oyo has secured commitments for the remaining $200m, people familiar with the matter told Bloomberg. The round values the company at $5bn.
Founded in 2013, Oyo partners existing hotels and rebrands rooms to offer a standardised service including toiletries and fresh linen that users can book through its website and app.
The company also offers staff training to its partner hotels, and takes a 25% commission on bookings. It has expanded across India, where its network has grown to 125,000 rooms, and into Malaysia, Nepal, the UK and China.
About $600m of the funding will support Oyo’s expansion across China, where it launched operations in November 2017 and has already entered 171 cities, rebranding 87,000 rooms. It will also invest in technology development and recruitment.
Oyo has now received a total of approximately $1.25bn in funding which will rise to $1.45bn when it obtains the additional $200m. Internet company Tencent was rumoured to be exploring a nine-figure commitment in July this year, but has not yet invested.
SoftBank Vision Fund previously led a $250m round for the company in September 2017, with participation from insurance and aerospace component provider Hero Enterprise, Lightspeed, Sequoia and Greenoaks Capital.
Hotel operator China Lodging Group provided $10m for Oyo the same month. SoftBank had already led the company’s $100m series B round in 2015, with commitments from Lightspeed, Sequoia and Greenoaks, returning the following year to add $62m.