Oyo books $200 million funding from Airbnb2 min read . Updated: 02 Apr 2019, 08:53 AM IST
- The Oyo-Airbnb deal will immediately allow Oyo’s 10,000 villas and homes in India, Dubai and other markets to be listed on Airbnb
- The Airbnb-Oyo deal is seen as bolstering the US company's hotel-booking business ahead of a planned IPO
Bengaluru: Airbnb Inc., the world’s largest home-sharing platform, on Monday said it has invested an undisclosed amount in India’s budget hotel startup, Oyo (Oravel Stays Pvt. Ltd), as the US company seeks to bolster its hotel-booking business ahead of a planned IPO. Two people familiar with the matter said Airbnb has invested between $150 million and $200 million in Oyo as part of the Indian startup’s Series E funding round.
The Oyo-Airbnb deal will immediately allow Oyo’s 10,000 villas and homes in India, Dubai and other markets to be listed on the Airbnb platform, expanding Oyo’s international reach and strengthening Airbnb’s presence in Asia, one of the two people cited above said, on condition of anonymity.
“Both will explore opportunities to collaborate on a range of projects," said the person cited above. “The key one is going to be making Oyo accommodation available on the Airbnb platform."
The home-renting company is adding hotels to its listings inventory as part of a strategy to attract travellers who find renting a home from a stranger risky.
The investment also underscores a growing trend of companies in the travel and hospitality segment exploring ways to leverage each other’s strengths.
On 8 March, Airbnb bought HotelTonight, an app for finding hotel rooms at a discount, ahead of its proposed initial public offering (IPO). In 2018, online travel operator Cleartrip acquired Saudi Arabia’s leading travel aggregator Flyin.
“A lot of these markets have evolved independent of each other and 1-2 players have built dominance in a local market or single country market or a local product market," said Aditya Agarwal, head of corporate strategy at Cleartrip. “And when you’re trying to enter these markets, it would be inefficient to compete with each other rather than collaborate with each other."
Analysts say that Airbnb is increasingly becoming a broad-based travel company rather than just a home rental platform. This deal further reinforces that perception which would be good for the company ahead of its public offering.
Since it entered the country almost three years ago, India has become an important market for Airbnb. While the home-rental platform has about 47,000 properties listed in India, globally Airbnb has almost 6 million listings across 81,000 cities in 191 countries.
“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," said Greg Greeley, president of homes at Airbnb.
Oyo has also been aggressively expanding its global footprint over the past one year by entering markets such as China, the US, United Arab Emirates and the Philippines, among others.
“Airbnb’s strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes," said Maninder Gulati, global chief strategy officer at OYO Hotels & Homes.
In India, Oyo is present in more than 259 cities, with more than 8,700 buildings and over 173,000 rooms, the hotel startup claims.
Oyo raised around $800 million from Japan's SoftBank Group Corp. last year as part of the Series E funding, which was followed by infusions from Chinese ride-hailing giant Didi Chuxing and Asian ride-hailing giant Grab. This round valued the company at around $5 billion.
Reuters contributed to this story.