The budget hotel-booking platform plans to tap into ‘pockets of profitability’ locally
Indian budget hotel-booking platform Oyo Rooms has secured US$100 million in its fifth round of funding from existing investors Softbank and an undisclosed international sovereign fund. Sequoia Capital, Lightspeed Venture Partners, Greenoaks Capital, DSG Consumer Partners and Venture Nursery are also reported to have taken part in the round.
Hindustan Times reported that the company plans to use the funding to expand its operation domestically, focussing on what it dubbed as ‘pockets of profitability’.
As an example, Oyo Rooms have been ramping up its inventory in the holy city of Ujjain ahead of the Mahakumb festival.
In the earlier four rounds, Oyo Rooms has raised US$125.65 million in total.
e27 has been reaching out to Founder Ritesh Agarwal for comments.
Also Read: 500 Startups invests in budget hotel booking platform RedDoorz
Founded in 2013, Oyo Rooms allows users to book standardised rooms at budget hotels through its desktop and mobile platform. It typically secured 10-15 rooms in a partner hotel.
By 2016, it claimed to have secured at least 5,000 properties from only 13 in July 2014, and is available in 175 cities in India.
In January, the company launched its entry to the Malaysian market, followed by an acquisition of its competitor Zo Rooms.
The hotel-booking industry gives plenty of opportunities for startups as its online penetration currently stays at 15 per cent, while the budget hotel business is worth US$20 billion. Hotel business has also become a hot trend as the margin is believed to be higher compared to what travel and booking agents earn from selling flight and train tickets.
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