OYO is ramping up its expansion in China like anything. There is news coming out of the second largest economy in the world that the company is looking to acquire Qianyu, a mid-size hotel based company. If this goes through, it will be the first-ever acquisition of a Chinese company in China from OYO. Backed by Softbank, OYO has just set the Chinese hospitality industry on fire. Entrackr even believes that the deal was closed a week ago.
Economic Times had contacted OYO over the same but OYO spokesperson had nothing concrete to share over this matter. These reports are floating just after Didi Chuxing, a ride-hailing company from China, invested around $100 million in the hospitality company OYO. This investment made the headlines as OYO reached a valuation of $5 billion with this investment.
That being said, OYO has referred to China as its second home. It is acquiring three properties every hour in China. That is how the company is now present in almost 300 cities. The numbers of OYO are just out of this world. In China, a country where outsiders are not welcomed when it comes to business. This is the second largest economy in the world and the reason for it is its policies of not allowing foreign companies in China and helping the homegrown companies.
OYO runs a mixture of franchises in China. It has leased properties as well and self-owned properties with hotels in the running as well. This mixture is turning out to be extremely good for the company as it is reaping a lot of profits. Although, the company is burning extra money in order to expand is another case.
OYO has around 5,000 hotels across China. Apart from this, it has 260,000 rooms in the Asian country. These numbers were noted down during January of 2019. Meanwhile, Qianyu is not the only company OYO has acquired in recent times. Innov8, which is a co-working venture is also acquired by OYO for an amount of INR 220 Cr. This happens to be an all-cash deal as Ritesh Agarwal-led company is headed in the right direction.
However, OYO’s recent $1 billion funding has majorly gone towards China. Almost $600 million has gone towards Chinese development. This is huge as the company is looking to increase its operations across the largest country in the world. China is also embracing OYO as it has never seen such type of hospitality ever.
OYO, at this moment, has six brands to show off – Oyo Rooms, Townhouse, SilverKey, Capital O, Palette Resorts and Collection O. Townhouse is something the company is also working on. Out of those $1 billion, $200 million have gone towards building more townhouses in the country. This is because the response to the same has been immense.