After being part of four funding rounds worth $512 Mn in OYO Hotels since August 2015, suddenly SoftBank seems to be putting all its hopes on this Gurugram-based hotel room aggregation company, which is expanding its presence in China.
Speaking at the Tokyo-headquartered Softbank’s 38th annual general meeting on Wednesday, the group’s chairman and chief executive Masayoshi Son called OYO Hotels a “next generation hotel company using the Internet service”. Son also revealed his plans to support OYO Hotels in its foray into China through a joint venture.
As Son said, “I would really like to introduce this (OYO Hotels) company to all of you. The founder (Ritesh Agarwal), as of today, is only 23 years old. He founded the company when he was only 19 years old. Only four years have passed, but it is growing exponentially.”
Masayoshi Son further iterated that OYO Hotels is the biggest player in the hotels business and owns about 100K rooms.
In a statement to ET, SoftBank further stated that the company continues to be invested in India over the long term and remains bullish on OYO.
Also, Son put equal emphasis on Paytm during his speech. As he said, “This (Paytm) is the number one payments company in India… It is ahead of us, and it is supported by Alibaba. Alipay became a leading player in the world in the area of payments, Paytm will follow that trend.”
More On OYO Hotel’s Foray Into China
Although speculation was in the air since May this year, the seeds for this move were sowed back in September 2017 when OYO raised $10 Mn from China Lodging Group. It then signed a MoU with China Lodging Group to facilitate and strengthen collaboration to build a global hospitality business.
China Lodging Group is a hotel operator and franchisor in China and has about 3,541 hotels and 359,530 rooms in operation across 369 cities.
With its foray into China, OYO is set to compete with well-established hospitality players in the country like GreenTree Inns, Motel 168, 7Days Inn, and Home Inns.
China is officially the third overseas market for OYO. The company ventured into the international market in January 2016 with a foray into the Malaysian market. In May 2017, OYO ventured into Nepal as well.
OYO currently claims to have transformed over 5,000 exclusive hotels in its chain through multiple formats including franchise, manchise and leased and is operating in more than 230 cities across India, China, Malaysia, and Nepal.
“After our successful overseas expansion and operations in Malaysia and Nepal, we are thrilled to offer OYO hotels’ hassle-free and standardised stay experience to guests in China,” Agarwal said in a statement released on Wednesday.
After the failed Snapdeal bet and losing Flipkart to Walmart, Paytm and OYO Hotels are the two core bets for SoftBank in India. Masayoshi Son believes that these two will not only see the strategic investor pick up stakes in market leaders, ranging between 20% and 30%, but will also see the self-styled unicorn hunter stay relevant for the next 300 years.
[The development was reported by ET.]