Oyo has officially closed the $1 Bn funding round that began few months back after Softbank and Grab together pumped $900 Mn. This after India’s largest hospitality company raised $100 Mn from Chinese ride-hailing giant Didi Chuxing.
According to Economic Times (ET), Didi has invested in Oyo through its subsidiary company Star Virtue Investment.
Sources claim that the Gurgaon based company will channelize most of the $1 Bn funding in its Chinese operation. The company is planning to invest nearly $600 Mn in China, people familiar with the matter claimed.
Among all its international operations, SoftBank backed company is not surprisingly attaching lot of importance to Chinese market. China’s hospitality market is enormously huge, with domestic market estimated to touch $100 Bn in the next 10 years.
Oyo & Didi’s partnership may grow beyond Chinese turf
Oyo’s success in highly competitive markets like China and Southeast Asia will depend on synergy and partnership. This explains company’s decision to make ride-hailing companies Didi and Grab as strategic investors. Both ride-hailing companies are dominant players in China and Southeast Asia and may help Oyo to leapfrog other competitors.
However, sources claim that Oyo and Didi’s partnership will not just confine to China. Both companies are likely to pursue global partnership as they continue to chart newer markets, sources add.
Gurgaon based company has been especially belligerent in pursuing international expansion in recent months. Apart from China, today company is present in several Southeast Asian countries, UK, Nepal and Middle East countries.
Oyo is also doing impressively well on the domestic front as has been claimed by recent numbers. The company reported more than three-fold jump in revenue in 2018 financial year. Company attributed this revenue growth partly to increase in franchise fees that it earns from merchants.
Meanwhile, Didi’s investment in Oyo is not its first in the Indian startup ecosystem. Chinese ride-hailing giant had invested $30 Mn in Ola in 2015 and continues to hold minority in the company.
