Airbnb seems to be marching ahead relentlessly and after sealing the deal with HotelTonight, the company announced on 1st April that it has invested in India’s OYO, a startup which manages budget hotels and other stays, according to a report by TechCrunch.
Rumours have been doing the rounds for the past couple of month and this comes as a shot in the arm for OYO which secured a $1 billion Series E round which was led Softbank’s Vision Fund, Grab, and Didi Chuxing. The deal which was announced last September valued OYO at $5 billion.
The size of the deal has not been confirmed by either of the parties, but sources close to TechCrunch say that the deal is somewhere in the region of $150 million to $200 million. Including this new capital, the company has raised more than $1.5 billion till now. It’s not all about the money as the deal is a strategic one for both the companies.
The deal is mutually beneficial for both the parties as Airbnb has been looking to expand its base in India for quite some time and its co-founder and CFO termed India as one of the five fastest growing markets in the world. The collaboration with Airbnb would help OYO which stands for ‘On Your Own’ to crack the overseas-traveller market. It may also look to make its presence felt in the U.S. market, after making its debut in U.K. at the end of last year. One other factor that makes OYO an attractive proposition for Airbnb is the fact that the company has a presence in China, which represented a key part of its focus following the Series E round.
Speaking about the partnership, Airbnb’s president of homes, Greg Greeley said:
“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 travellers. We share a dedication to offering people more choices when travelling and we’re excited to partner with OYO as we work to make Airbnb for everyone.”
Currently, OYO has close to 500,000 rooms across 13,000 hotels and 6,000 homes spread across eight countries and currently, the company is focusing on Southeast Asia, where it feels that its partnership with Grab will help it to crack the market.