Airbnb in plans to invest $100-200 Million in Oyo

Key Highlights

Airbnb looks to invest $100- 200 Million in OYO.

Airbnb is planning to expand its lodging offerings beyond home rentals.

OYO loss is lowered by 10% in 2018-19

Oyo is expanding its business aggressively and attracting several investors to assist it in this motto. Oyo is fleeing so rapidly that within six months of its fundraising from Japanese Conglomerate Softbank, Sequoia and other existing investors has attracted another marquee investor on board – Airbnb. 

UA based travel giant Airbnb is investing $100 – 200 Million in OYO to meet its business requirement in India and China and to accelerate its hotel business. Out of the global presence of Airbnb, it has 5% presence in China and 1% in India.

According to Nathan Blecharczyk, co-founder and Chief Strategy Officer Airbnb, “India is a crucial business opportunity for Airbnb as it a huge number of millennials, young people and spectrum of the population”.

He also added investment can provide it an opportunity to expand its business from accommodation to travel. Airbnb is famous worldwide for its home rental facility for tourists. It is planning to expand its lodging offerings beyond home rentals. It is gearing its Initial public offering and before it has invested $400 Million in hotel booking startup Hotel Night and is also planning to invest in Oyo.

Having Airbnb as an investor on its board will assist Oyo in expanding its business in the US because it has initiated its operation in the US a while ago by having a single property in Texas. It will also patronize Oyo in its international as well as product expansion plans, Airbnb’s brand value and market knowledge will assist it in enhancing its strategy while figuring out the future of the company.

Oyo has its presence in 259 cities in India with more than 8700 hotels and homes and more than 173,000 rooms in its basket. Oyo offers its services in more than 500 cities spread across Indonesia, UAE, China, UK, Japan, Malaysia, Philippines, and Nepal.

Gurugram based hotel renting unicorn has made an announcement last week to invest Rs. 1400 in its India and South Asia business expansion to enhance its internal capability, technology, and infrastructure. Oyo in order to expand its existing portfolio budget- to mid-segment hotel chain brands has announced the release of new brand Collection O hotels. 

OYO is also lowering its losses as a percentage of realized value (OYO Hotels’ sales run rate) year-on-year from 44.5% in 2016-17 to 20.3% in the following year and 10% in 2018-19.

In December Airbnb acquired Luckey Homes a small French property management startup and took some stocks in co-working spaces and social clubs for women startup The Wing.

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Himanshu Gupta

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