After raising $250 million from Softbank Vision Fund, budget hotel platform OYO Rooms has secured $10 million strategic investment from multi-billion dollar hotel management firm China Lodging. According to media reports, China Lodging has picked-up less than 5 percent stake in the Gurugram-based company.
The investment will be followed by alliances in areas including local sourcing and procurement, joint loyalty programmes, venture partnership opportunities and technology sharing, OYO Rooms said in a statement.
“The MoU signifies the shared aspirations of China Lodging Group and OYO to explore growth opportunities in the global hospitality industry and to create synergies by working together,” said Jenny Zhang, CEO, China Lodging Group.
Last week, the company raised $250 million from Softbank Vision Fund and Hero Enterprise.
Presently, OYO, claims to operate 8,500 hotels and 70,000 rooms in more than 230 cities in India. Founded in 2013 by Ritesh Agarwal, OYO so far has secured about $452 mn. China Lodging operates over 3,500 hotels across some 369 cities in China.
“OYO is a new-age technology company disrupting the hospitality industry with category-leading capabilities of using technology to transform existing supply and standardise operations and distribute these through online and offline channels. Addressing consumers in India and China – two of the world’s fastest-growing markets – through our combined strengths opens up a large and significant growth opportunity,” said Ritesh Agarwal, founder and CEO of OYO Rooms.
Meanwhile, OYO’s losses widen to a whopping 25 times in 2016 as compared to previous year. It posted loss of Rs 496 crore in the year 2016 while its expenses rocketed to Rs 520 crore in that period from about Rs 32 crore in the year 2015, according to business research platform Tofler.
OYO posted revenue of Rs 32 crore in 2016, 16 times up from Rs 2 crore in 2015. The company recently announced that it narrowed losses to Rs 325 crore in the last fiscal.
OYO, runs under Oravel Stays Pvt. Ltd, was founded by Ritesh Agarwal in 2012.