Oyo Soon to Join the Unicorn Club with Investment from Tencent at Over $2B Valuation
Budget hotel brand OYO is in talks with China’s internet giant Tencent to raise $300-500 million funding at a valuation of over $2 billion. If the deal comes through, OYO would be the fifth company to join the unicorn club this year after Paytm Mall ($1.9B), Byju’s ($1B), Swiggy ($1.3B) and PolicyBazaar who recently got the valuation of $1 billion after raising more than $200 million from investors led by SoftBank Group's Vision Fund.
Previously, the Gurugram-based company was valued at $850 million when it last raised $250 million in 2017, mostly from existing investor SoftBank through its Vision Fund.
Recently, OYO launched its operations in China and is currently running 11,00 hotel rooms in 26 cities including Hangzhou, Guangzhou, Chengdu and Shenzhen, among others. The company plans to utilise the new funds for its expansion in the Chinese market. Apart from China & India, It also runs operations in UK, Dubai, Malaysia and Nepal.
The Japanese telecom and internet major SoftBank is the single-largest stakeholder in the company with a stake of 42%. The company is also backed by investors like Lightspeed Venture Partners, Sequoia Capital, Hero Moto Corp, and Greenoaks Capital among others. It operates in three categories - the aggregation business brand OYO Rooms which contributes 90% of its revenues, along with Townhouse and Flagship, where the company leases properties and services them for a better quality experience.
