Is SoftBank looking to create the Airbnb of India with $100 mn investment in budget hotel platform Oyo Rooms?

Branded budget hotel network Oyo Rooms, which had raised $25 million from Lightspeed Ventures, Sequoia Capital, Greenoaks Capital and DSG Consumer Partners in March, could be looking at a massive $100 million (Rs 630 crore) fresh funding from Japanese telecom and internet giant SoftBank. According to a report in the Times of India, Softbank, an existing investor in e-tailer Snapdeal, taxi-hailing service Ola and realty portal Housing.com, is looking to pick up a 25-30% stake in the startup founded by Ritesh Agarwal, 21, a college dropout, as Oravel Stays three years ago. It seems Softabank is now focussing on the Uber of hotels where users can do on-demand booking without waiting for a reply from a host, and they can check in and out instantaneously instead of waiting at a reservation desk. [caption id=“attachment_2249770” align=“alignleft” width=“380”]  Screengrab from Oyo Rooms[/caption] OYO Rooms leverages technology and enables consumers to have hassle-free budget hotel booking experience while it helps hotels/guesthouses to increase their occupancy. The idea is simple: provide users with quality budget stays but through aggregation and co-branding rather than by owning and running their own properties. Hotel owners that partner with Oyo can see a significant spike in occupancy levels. Oyo makes sure that their facilities meet a baseline of requirements from linen quality to breakfast to Internet access for a starting price of Rs 999. The company works with each partner hotel to improve their facilities over the span of a week before launching on the platform. The décor and looks of the room are also changed completely before OYO takes them up. The company trains the staff and enables a technology driven hassle free checkin/checkouts and enhanced stay experience. OYO Room rates are inclusive of taxes and are equipped with comfortable beds, air-conditioning, TV, free unlimited Wi-Fi, clean attached washrooms and complimentary breakfast service. The start-up currently has more than 350 hotels  under its brand in Delhi Goa Gurgaon Mumbai Bangalore Chennai Hyderabad Noida Jaipur Manesar Chandigarh Kolkata Neemrana Ghaziabad Pune Varanasi. It plans to add plans 1,000 hotels across 25 cities by the end of this year. OYO was also part of VentureNursery accelerator program’s first batch and had also received a $100,000 grant as part of 2013 Thiel Fellowship program in October 2013. Oyo’s competitors include backpack hostel startup Zostel and Chennai-based  online accommodation start-up Stayzilla but Oyo’s growth has been phenomenal  from just 1 hotel in 2013 to over 350 hotels in 16 cities till this point of time. Moreover, while OYO is for everyone who is travelling to a city for business/leisure/travel purpose, Zostel focuses on backpackers. A recent report by consultancy firm Cushman and Wakefield has said that about 52000 hotels rooms are expected to be added in India between 2013 and 2017, 36% of these in mid-tier hotels and 17% in budget hotels. So with Softbank’s backing, can Oyo become the Airbnb of India? Softbank is currently the largest investor in the Indian e-commerce space and intends to invest about $10 billion in India over the next few years. In December, it invested $90 million in Housing.com. In October, the company had invested $627 million in Snapdeal.com, while about $210 million was deployed into Ola Cabs. In November it acquired 36.5 percent stake in ScoopWhoop, an India-focused media start-up, for an undisclosed amount.