The Ritesh Agarwal-led hotel aggregator major Oyo Rooms may soon close a merger with Zo Rooms after months of delay.
The deal, announced earlier this year, is pending for want of funds. This will change after Japan’s SoftBank recently pumped $61 million into Oyo Rooms.
Sources said the sixth round of funding was divided in two tranches with $29 million coming in as a mix of equity and debt. Oyo Rooms declined to comment on the matter.
This is among SoftBank’s first major funding rounds in its Indian portfolio after Nikesh Arora’s exit from the company where he served as president. Before stepping down, Arora had named Oyo Rooms as among SoftBank’s good investments.
According to documents filed with the Registrar of Companies by Oravel Stays Pvt Ltd, the company that owns Oyo Rooms, its existing investors Greenoaks Capital, Sequoia Capital and Lightspeed Venture Partners did not participate in this round of funding.
According to industry experts, after the Zo Rooms acquisition, Tiger Global, one of its main investors, may come on board as an investor in Oyo Rooms.
“Oyo Rooms will now aim at being the biggest hotel aggregator in India and compete with companies like MakeMyTrip. Next year, Oyo Rooms may go in for a bigger funding round,” said a source close to the company.
Oyo Rooms has been in the market for funds for a few months but investors have been playing it cool after a rush of funding rounds last year. Sources said Oyo Rooms’ valuation after the latest round of funding was $650-$700 million.
The company had last year raised $100 million from SoftBank, Lightspeed Venture Partners, Sequoia Capital India and Greenoaks Capital. In April this year, Oyo Rooms raised another $100 million from SoftBank, Sequoia Capital, Lightspeed Venture Partners, Greenoaks Capital, DSG Consumer Partners and Venture Nursery.
Oyo Rooms had said in May it had achieved unit profitability at an aggregate level in 170 cities.
“Our team delivered 15x year-on- year growth with 2.3 million booked room-night transactions in January-March 2016 while our gross merchandise value continues to grow aggressively every month. The cities driving profitability include Gurgaon, Delhi, Hyderabad, and Kolkata,” Agarwal had said then.
Oyo Rooms has 5,855 hotels in its network with an inventory of 68,300 rooms. It aims to triple this inventory by December.
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Source: Business-Standard