India’s Oyo to buy European hospitality firm
The app-based startup will acquire vacation rental company Leisure Group from Axel Springer for US$415 million.
App-based Indian hospitality startup Oyo Hotels and Homes, which has been trying to increase its presence in Europe, is set to acquire Amsterdam-based vacation rental company @Leisure Group for 28.85 billion rupees (US$415 million).
The SoftBank-backed startup will acquire @Leisure Group from German media company Axel Springer and the transaction is expected to be done by next month. It will be one of the biggest acquisitions by an Indian unicorn – a privately held startup company valued at more than $1 billion – Business Standard reports.
After the acquisition, Oyo will become a global real estate brand while maintaining its strong presence in the hospitality industry. Through its subsidiaries, @Leisure offers more than 30,000 fully managed holiday homes across 13 countries in Europe.
Its Traum-Ferienwohnungen brand offers a subscription-based home management service with more than 85,000 homes across 50 countries. This represents a total inventory of 300,000 rooms. Europe will be Oyo’s largest market, accounting for up to 40% of supply, the daily added.
Oyo is owned and operated by Oravel Stays and is based in Gurgaon, near New Delhi. Founded in 2013 by Ritesh Agarwal, who was only 19 at the time, it has now become India’s largest hotel chain by number of rooms.
Agarwal’s business strategy was to offer small budget independent hoteliers the opportunity to benefit from economies of scale by joining his rapidly growing Oyo franchise. For small hoteliers joining the franchise, it meant a 25% to 70% jump in occupancy and they could offer better room and service quality at a lower tariff.
Now Oyo is present in more than 500 cities across 10 countries and hosts millions of guests in over 18,000 hotels and homes in 515,000 rooms.
In March, Oyo ventured into the business of co-working spaces by acquiring Innov8. It aims to open more than 35 new co-working spaces in major metropolitan cities over the next year. It has also started two new co-working brands – PowerStation and WorkFlo, which will cater to a variety of startups.
Source: Asia Times