Home-renting major Airbnb invests in OYO

Home-renting giant Airbnb has invested an undisclosed amount in hospitality chain OYO, as it dives deeper into the hotel-booking business.

Airbnb said the investment is part of OYO's series E funding round, although it didn't disclose the funding size. With this, Airbnb will be joining a clutch of high-profile investors in OYO like SoftBank, Sequoia Capital, Didi Chuxing and Grab who recently invested $1 billion into the Gurugram-based firm at a valuation of $5 billion.

This move comes at a time when Airbnb is looking to ramp up its operations in the country after witnessing significant growth in the number of guests and listings last year. In February, Airbnb co-founder and chief strategy officer Nathan Blecharczyk had told ET that India is among the five fastest-growing nations for the company.

Post this investment, Airbnb said it will look at ways to make the OYO accommodation available on its platform. OYO currently claims to have more than 8,700-plus buildings and over 173,000 rooms under its management in India while Airbnb has an inventory of 45,000 listings in the country.

"Emerging markets like India and China are some of Airbnb's fastest-growing, with our growth increasingly powered by tourism to and from these markets," said Greg Greeley, president of homes, Airbnb.

The move comes weeks after Airbnb acquired the last-minute hotel-booking app HotelTonight for $400 million, ahead of a much anticipated initial public offering.

Once direct rivals, both OYO and Airbnb have acknowledged each other as partners in recent months, after the former shifted its model from being a pure hotel aggregator to a hospitality player.

"If you look at what we do, it is very different from what Oyo does or anyone else for that matter. I think we each have our own approach to the market, and we each have a loyal following, and a sizable following," Blecharczyk had told in an interview to ET last month.

Airbnb is also expected to benefit from OYO's growing footprint in China, a geography that the Gurugram-based firm has begun referring to as its second home market. OYO's China business Oyo Jiudian operates more than 5,000 hotels and 260,000 rooms across 280 cities as of January 2019.

On the flipside, Airbnb's backing will accelerate OYO's global expansion spree. Over the past year, it has entered markets like the United States, Saudi Arabia, Philippines, United Arab Emirates, and Sri Lanka among others. The company claims to have over half a million rooms across the world.

"Airbnb's strong global footprints and access to local communities will open up new opportunities for OYO Hotels & Homes" said Maninder Gulati, global chief strategy officer at OYO Hotels & Home.

(With inputs from Reuters)