OYO Rooms receives its funding from China Lodging Group
The Chinese hotel operator bought the one-percent equity stake in OYO for a consideration of RMB 66,467 thousand (approximately $10 million).
Chinese hotel operator and franchisor China Lodging Group has disclosed that it has secured a one-percent equity stake in Oravel Stays Private Limited, which runs OYO Rooms, by investing its total $10 million committed to the online hotel aggregator, in a recent SEC filing.
Apart from investing, China Lodging, as part of the agreement, will also explore opportunities for mutual collaboration in three fields - knowledge and technology sharing, strategic alliances and partnerships - in various areas including, but not limited to, local sourcing and procurement and joint loyalty programmes, and new venture partnership opportunities.
The Chinese hotel operator bought the one-percent equity stake in OYO for a consideration of RMB 66,467 thousand (approximately $10 million).
Last September, OYO said that China Lodging Group signed an agreement to invest $10 million (over Rs 63 crore) as equity in the company. China Lodging Group, in its SEC filings, stated that “we entered into a five-year memorandum of understanding in September 2017 with Oravel Stays Private Ltd (“OYO”), where we agreed to make a $10 million equity investment in OYO to become a minority shareholder (less than five percent)”.
Oyo founder and CEO, Ritesh Agarwal, said, "We are happy to share that we have received great interest in our series D round where China Lodging participated which had been announced earlier. India's largest hospitality aggregator, Oyo is now partnered with China's leading hospitality chain and we will share learnings with each other. It is a continued sign of Oyo's leadership and mission of bringing quality living spaces for a billion and being appreciated by world leading hotel chain like China Lodging".
The filing also disclosed that Min (Jenny) Zhang, Chief Executive Officer, China Lodging Group, has been appointed as one of the directors of Oravel Stays Private Limited in January 2018.
OYO recently raised about $260 million in a funding round led by SoftBank, which included participation from all existing investors and new ones like China Lodging Group and Hero Enterprises.
The company posted a 33-percent decline in its losses to the tune of Rs 330.9 crore for the year ended March 2017, according to filings with RoC. In FY16, Oravel Stays Private Limited had posted a loss of Rs 496.3 crore. Its revenues increased fourfold to Rs 87.2 crore in FY17 from Rs 17.5 crore in FY16.