Budget consolidation – Oyo Rooms buys rival ZO Rooms
Budget hotel booking service OYO Rooms-backer Softbank has announced the buy-out of rival brand ZO Rooms.Oyo has become the largest homegrown player in the market since its foundation while ZO Rooms has previously scored a $32 million round of its own.
Budget hotel booking service OYO Rooms-backer Softbank has announced the buy-out of rival brandZO Rooms.
The financial powerhouse, which led a massive $100 million round into Oyo Rooms in August of last year, says in its latest earnings report that the India-based company has acquired ZO Rooms, although no fee is disclosed.
ZO Rooms has previously scored a $32 million round of its own and is rumoured to be laying off hundreds of staff ahead of the deal taking place, so is no small player in the burgeoning budget sector in India.
Oyo’s meteoric rise has been well documented, with it being founded two years ago by Ritesh Agarwal, a 21-year-old. It has since become the largest homegrown player in the market.
Oyo Rooms puts its brand on hotels to bestow a marketing halo that comes with a promise of consistent quality. For a hotel to be accepted it must offer certain amenities, such as air conditioning and free breakfast.
Startups whose businesses overlap with its core services, alongside ZO Rooms, include Wudstay andStayzilla (which has raised more than $15 million).
The company’s path into the mainstream hasn’t come easily, with it and Zo Rooms both being blocked by MakeMyTrip in November last year.
In its earnings presentation, Softbank says Oyo secured just short of 900,000 room nights during the final quarter of 2015, up 34-fold on the previous year.
Oyo has yet to respond to requests for further details about the acquisition.
Read original article