Oyo to make its first Chinese acquisition by buying midscale Chinese hotel brand Qianyu

Key Highlights

Oyo to buy Qianyu a midsize hotel brand in China.

Till January 2019 Oyo Jiudian is present in 280 cities across China and has more than 5,000 hotels and 2,60,000 rooms.

Qianyu and Oyo work on a franchise

SoftBank backed Oyo Hotels and Homes is in talks to acquire a midsize hotel brand in China, Qianyu. This deal is going to be the first acquisition of any company in China by hotel renting a unicorn. Oyo entered in China in late 2017 and is aggressively enhancing its business in the world’s second-largest economy.

Oyo’s Chinese subsidiary, Oyo Jiudian, is present in 280 cities across China, operating more than 5,000 hotels and 2,60,000 rooms, as of January 2019.  Oyo has made China its second home market. It operates a combination of franchised and leased properties in the country. 

SoftBank backed Oyo Hotels and Homes is in talks to acquire a midsize hotel brand in China, Qianyu. This deal is going to be the first acquisition of any company in China by hotel renting a unicorn. Oyo entered in China in late 2017 and is aggressively enhancing its business in the world’s second-largest economy.

Oyo’s Chinese subsidiary, Oyo Jiudian, is present in 280 cities across China, operating more than 5,000 hotels and 2,60,000 rooms, as of January 2019.  Oyo has made China its second home market. It operates a combination of franchised and leased properties in the country. 

Acquisition of Qianyu will assist Oyo in accelerating its expansion and gain local talents and experts. Qianyu is backed by Gaochun Capital, Xu Xiaoping’s Reality Fund, Didi’s investor Wang Gang and Ali’s Yuanhao Capital.  It is a midscale hotel brand and follows the franchise model to bring hoteliers under the brand.  It operates in the same way as Oyo does in India. It renovates existing properties, give its brand and pool in bookings for them through OTAs. According to a Chinese news portal CaiJing, Qianyu covers thousands of rooms in many cities including Chengdu, Beijing, Xi’an, and Shanghai.

Oyo has excelled its business in China vastly since November 2017 has 11,500 employees in which 6,000 are working on contract basis.  Firm has recently acquired Weddingz and Innov8 in India. Oyo operates six brands under its portfolio — Oyo Rooms, Silverkey, Townhouse, Palette Resorts, Collection O and Capital O.

Oyo recently raised $1 Billion and is using $600 Million of funds in its operations at China and rest on concentrating at another overseas market like the UK and South East Asia. Oyo has tripled its revenue from India as it earned 416 Crore from previous years Rs. 120 Crore. The company has drafted a revenue plan of Rs. 1,500 Crore for current financing year.

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