NEW DELHI (Reuters) - Hotel chain OYO Hotels said on Tuesday it would raise $1 billion from existing investors, including Japan’s Softbank Group (9984.T), to grow its business in India and China, and expand into new international markets.
In the latest funding round, which could value OYO at about $5 billion, it has already raised $800 million from investors led by Softbank’s Vision Fund, the world’s biggest private tech investor, and Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital.
The investors have committed to invest an additional $200 million, OYO said.
Markets such as Southeast Asia and the Middle East, which have a large volume of unbranded hotels, offer the budget accommodation provider the potential to expand, OYO’s founder and Chief Executive Officer Ritesh Agarwal said.
“While we will double down on our investment in home markets, we will open new geographies in the future,” Agarwal told Reuters. “We have a very large opportunity worldwide.”
OYO plans to invest $600 million of the new funds in China, where the hotel aggregator has expanded into 171 cities and 87,000 rooms since its launch in the country about 10 months ago. The company will use the remaining funds to expand in India and enter new markets.
India’s fastest-growing hotel chain will continue to diversify its portfolio of hotels and target the middle-income and low-income travelers, Agarwal said.
Founded in 2013, OYO partners with independent and small hotel owners and works with them to standardize the rooms and services before selling the OYO-branded rooms to travelers through its website and other travel partners.
OYO has hotel rooms in more than 350 Indian cities, and in countries such as China, Malaysia and Nepal. It recently entered Britain with plans to sign up 300 independent hotels before 2020.
(This story corrects CEO’s second name to Agarwal from Jain throughout)
Reporting by Aditi Shah; Editing by Gopakumar Warrier and Sherry Jacob-Phillips