Hotel brand Oyo has acquired corporates focused executive furnished accommodation platform Novascotia Boutique Homes in an all-cash deal. The deal said to be materialised in about $1 million. Notably, this is the first acquisition by the Gurugram-based company since its inception in 2011.
Novascotia Boutique Homes claims to manage 400 plus rooms across cities such as Chennai, Hyderabad, Cochin and Coimbatore and Bengaluru. It offers services including pantry, laundry, housekeeping and on-demand transportation amongst others.
The acquisition will give firm ground to Oyo towards corporates segment and expertise in managing service apartment.
In December last year, Oyo had pivoted to become full stack hospitality company. The Gurugram-based company is now pure-play franchise business which allows hotel partners to become Oyo branded hotel.
The move was largely motivated to cut losses and deliver uniform experience and pricing across properties.
Besides giving firm footing in service apartment and corporate segment, the acquisition will also provide upper hand in the southern region of the country. Oyo manages about 16,000 rooms in 900 exclusive hotels across Andhra Pradesh, Karnataka, Kerala, TamilNadu amongst others.
Flush with $250 million round, the SoftBank-backed company has been eyeing multiple acquisitions this year. Ritesh Agarwal, founder, and CEO of the company had recently reiterated that Oyo will splurge capital in acquiring relevant companies.
OYO had scooped up $250 million (around Rs 1600 crore) from its existing investor SoftBank and Hero Enterprise.
Meanwhile, over years, Oyo had racked up huge losses without any significant revenues. It posted a loss of Rs 496 crore on a revenue of Rs 32.8 crore in the financial year FY16. Though, the company reduced its losses by a third in FY17, to Rs 325 crore.
Oyo forayed in the international market with services in Malaysia and Nepal in January and April last year, respectively. Currently, it claims to have around 8,500-plus hotels in more than 230 cities across India, Malaysia, and Nepal.
The development was first reported by ET.