Oyo has today closed a new funding round, worth around ₹1,600 crore ($250 million), which was led by its existing investor — SoftBank. Along with SoftBank, a new investor is also coming onboard, Hero Enterprise.
The round also witnessed participation of its existing investors, which include Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital.
SoftBank has invested in the current round through its $100 billion SoftBank Vision Fund. This marks the second major bet through Vision Fund in India in recent months.
While the financial details around the deal have not been disclosed, some reports suggest that the company has been valued at around $850 million-$900 million. If this is true, then the valuation represents a significant rise than its last reported valuation of $460 million.
Sunil Kant Munjal, chairman of Hero Enterprise, said,
The differentiated thinking and ingenuity that Ritesh and his team bring to this industry gives us confidence that OYO can scale, innovate and set new benchmarks in customer experience.
Justin Wilson, SoftBank’s board representative in Oyo, said in a statement:
OYO has solidified its position in India as the leading accommodation brand for consumer affordability and high quality standards. We’re excited to continue to support OYO as they further expand their position in India and bring the OYO promise of affordability and elevated hospitality to other markets around the world.
OYO was founded in 2014 by Ritesh Agarwal, a college drop-out who plunged into entrepreneurship at the age of 17. The company’s vision is to standardize and build efficiency into all forms of real estate such as budget hotels, apartments, guest houses and resorts.
Earlier this year, the company had raised a funding round from SoftBank, to further expand its network. Currently, it claims to be operating 8,500 hotels and 70,000 rooms in more than 230 cities across the country.
The startup has recently shifted its focus towards Townhouse, which targets the mid-premium segment as compared to budget consumers. Oyo is taking properties on lease to control customer experience via Townhouse Properties. The hotel aggregator is planning to introduce 200-250 Townhouse properties across the country by the end of this year.