Budget hotel aggregator OYO Rooms has raised INR 413 crore (around USD 62 million) from SoftBank Group Corp and the investment has been confirmed by the documents filed by OYO with the Registrar of Companies. The documents suggest that none of the other existing investors, Greenoaks Capital, Sequoia Capital and Lightspeed Venture Partners, participated in this round of funding. An official confirmation from OYO hasn’t been received yet.
The company was looking to buy back shares from some of the existing investors for around INR 60 crore but the names of stakeholders haven’t been revealed. This news comes amidst the funding slowdown in the region. SoftBank has made significant investments in the Indian market including cab-hailing service Ola and e-tailing platform Snapdeal however this is the first investment here since Nikesh Arora stepped down from his role in SoftBank.
Last year there was lot of momentum in the budget hotel space with OYO Rooms emerging as the hero India’s budget hotel industry needed. However, sudden emergence of multiple players in the space and certain controversies slowed things down. The other players in this segment have raised funds including Bengaluru based Treebo Hotels raising USD 16 million in Series B round led by Bertelsmann India Investment along with the existing investors.
Along with the budget hotels, OYO Rooms has started looking at alternative accommodation as well. In order to do so, the brand is associating with various state tourism boards to promote tourism in the region while supporting the trend of homestays.