Half a month ago, The Information had circulated a report saying that US-based homestay aggregating application Airbnb is in talks with Indian hospitality chain OYO Rooms and is likely to invest around $100-200 million in the Indian startup.
According to the latest report by Reuters, Airbnb has closed the investment in the Series E round being raised by OYO. Even while the amount of funding still remains unknown, the motive of the US realty giant is clear.
It wants to cash on the growing hospitality and tourism industry in the country. Airbnb realised that the traction on its own platform isn’t growing as planned, partly due to the hesitation in the Indian population against staying in stranger’s houses.
Hence, the company’s interest in India’s largest hotel chain OYO is obvious, that is also one of the fastest growing startups in current times. The investment comes with Airbnb’s plans to list a few OYO properties on its platform so as to increase traction cashing on the affordability, brand name, and value that is attached to the company.
With this, the US company gains access to a variety of leased and franchised hotels to increase the inventory on its platform as well.
For OYO this is an opportunity to cash on Airbnb’s presence in the larger world, especially the USA. It can gain valuable insights and Airbnb’s strong global footprint and access to local communities is slated to offer new opportunities to OYO and its expansion plans, reports Reuters.
The Ritesh Agarwal led startup has been on a massive expansion spree since the last year, if it hadn’t been said enough. Southeast Asia based ride-hailing application Grab, China’s ride-hailing giant Didi Chuxing, and their common investor SoftBank, all participated in the company’s recent $1 billion funding round.
The company has also been making expansions all around the world.
Case in point, OYO latest press release announcing the launch of 1000 new accommodations under the OYO Life brand in Tokyo, Japan.
Airbnb, on the other hand, is also expanding its hotel based accommodation offerings on the platform. It had recently acquired HotelTonight to offer last minute hotel bookings. All of this comes around the time when the ecosystem is eagerly waiting for Airbnb’s impending Initial Public Offer (IPO).