Budget hotel aggregator startup OYO Rooms is holding discussions to raise $500-$800 Mn through a new funding round from SoftBank, according to people familiar with the matter. The development comes barely six months after OYO Rooms secured $250 Mn from SoftBank, followed immediately by another 10 million funding round led by a Chinese hospitality company.
The latest development also comes barely days after the Gurugram based startup made its first-ever genuine acquisition by acquiring a service apartment operator Novascotia Boutique. Interestingly, sources claimed that OYO Rooms’ primary purpose to go for latest fund raising round is to fuel its international expansion.
If this is indeed true then it very well appears that OYO Rooms is seriously planning to pursue strategic growth through inorganic or acquisition route. Till date the company has mostly stayed away from fueling growth through acquisition route. This is clearly reflected from the fact that so far it has bought small startups only through acquihire route.
Several reports also claim that the impending funding round will capitulate OYO Rooms into the unicorn status category. This will make the Gurugram based startup the first startup from an hotel aggregator space to boost a billion or more than a billion valuation. After its last fund raising round, OYO Rooms was valued around $850-900 Mn.
The Japanese investment giant SoftBank’s association with Oyo Rooms stretches back to August 2015, when it led an $100 mn round along with other investors inculding Lightspeed Venture and Sequoia India, followed by another $100 mn round in 2016 and $250 mn round in last year. The startup’s other investors include Greenoaks Capital, Hero Enterprise and DSG Consumer Partners.
It is also worth noting that OYO Rooms has managed to hog lot of limelight in the Indian media owing to its immensely young CEO Ritesh Agarwal, who is barely 23 years old and is today one of the youngest millionaires in the country.