Mint reported in March that Oyo was in talks with SoftBank to raise $800 million to boost its presence in India, as well as accelerate its international expansion.
After the acquisition of Flipkart by Walmart earlier this year, Paytm is India’s most valuable start-up, valued at over $10 billion.
Gurugram-based Oyo has expanded its presence to five countries in just 10-12 months. The company is now present in India, China, Malaysia, the UK and Nepal.
Oyo plans to expand its presence in South-east Asia and sees West Asia and parts of Europe as potential new markets, Agarwal said, without disclosing details.
“We will continue to explore newer businesses while remaining focused on both organic and inorganic growth,” Agarwal said in the statement. “We will also deploy fresh capital to take our unique model that enables small hotel owners to create quality living spaces, global.”
Oyo has more than 125,000 rooms in India and about 87,000 in China across 171 cities, according to the company.
“Oyo has grown exponentially to become the largest hotel chain in South Asia, and is swiftly expanding to international markets,” said Munish Varma, partner, SoftBank.
Oyo is present in more than 350 cities across the five countries and claims to host more than 125,000 stayed room nights every day.
In September 2017, Oyo raised $250 million, mostly from SoftBank Vision Fund. Sunil Munjal-led Hero Enterprise had also invested in the round, along with Oyo’s previous shareholders Sequoia India, Lightspeed Venture Partners and Greenoaks Capital.
Oyo was one of the breakout start-ups from the funding boom of 2015, raising a surprise $100 million from SoftBank in August that year. But after an expansion spree, the firm, which began as a marketplace, struggled to keep pace as customers complained of poor service and many rooms remained unoccupied.
Over the past year, Oyo has effected a turnaround, driven by its effort to gain full control of the room inventory on its platform. Its occupancy rates and net promoter score (a measure of customer satisfaction) have both improved significantly over the past year, the people cited above said.
The launch of its Townhouse brand in January 2017 played a key part in improving Oyo’s image with customers. Townhouse properties are owned by Oyo and fully managed by the company’s staff—they work like any other branded budget hotel. Townhouse has helped Oyo improve customer service and address the problems of fake bookings and high cancellation rates that it faced under the marketplace model.