Zo Rooms Shuts Website & App; Merger On Cards?

Putting an end to all the rumours, leading budget hotel aggregator OYO Rooms is all set to acquire Zo Rooms in an all stock deal.

According to the person close to the development, “The talks initiated in December and now we are almost through the deal. There will soon be an official announcement.”

Zo Room’s website has not been in operations for over past 24 hrs, which led us to enquire further about the company’s status.

The person stated above said that looking at the market scenario, its existing investors are not keen on extending investments with Zo rooms which has led the company to seek more avenues. The startups exclaimed that about 40% of its employees are being retained in the deal. Whereas, it has helped placing its rest of the employees in other startups and companies, through its network.

The rumors for this anticipate deal started in December last year. However, as the deal finally comes to a close it will mark as one of the biggest deals for 2016. In the list of big deals for the year 2016, we have Quikr acquiring CommonFloor for $200 Mn.

More details of the deal are soon to follow.

Zo Room’s parent company, Zostel Hospitality Pvt Ltd, was founded in August 2013 by Dharamveer Chouhan, Akhil Malik, Paavan Nanda, Tarun Tiwari, Chetan Singh Chauhan, Abhishek Bhutra and Siddharth Janghu with an initial corpus of $30K (INR 20 Lakh). The startup has two brands, ZO Rooms, chain of premium budget hotels, and Zostel, a chain of backpacker hostels. For the FY14-15 revenue for Zo Rooms was INR 2.6 Cr and for OYO Rooms it was INR 2.4 Cr.

Recently, Zo Rooms launched Zo Prime, a premium offering in the 3 star hotels which provides amenities and luxuries as per 3 star standards. The company had plans to launch ZO Apartment (service apartments, starting with a price of $23), ZO Homes (‘bed and breakfast’ and ‘homes’ category) and ZO Star (super-premium and ultra-luxurious offering which caters only to 4 star and above hotels across India).

Apart from Oyo, other players in the domain include WudStay, Fabhotels, Nightstay, Treebo, Zip Rooms and Zen Rooms.

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