Oyo Rooms joins the unicorn club

Hotel chain Oyo Rooms said it would raise $1 billion from Japan's SoftBank Vision Fund and other investors, making it India's second-most valuable start-up after Paytm and the latest to join the coveted unicorn club. The latest funding values the company at a little less than $5 billion, a more than fivefold jump from the $900 million valuation at which it raised funds in just the previous year. The $1 billion fundraise includes a commitment by some investors to put in an additional $200 million. Existing investors Lightspeed Venture Partners, Sequoia and Greenoaks Capital have also invested in the current round. JP Morgan advised Oyo on the fundraising. The latest funding will give Oyo Rooms the necessary firepower to continue its aggressive expansion outside India into China, West Asia and other markets. Oyo's founder Ritesh Agarwal said China and India are Oyo's top markets and the company will deploy the maximum resources in these two countries. In a statement, Oyo said it would invest around $600 million to strengthen its position in China. “India has 4.3 million unbranded rooms and China has 35 million, but there is only a 25 per cent occupancy rate. We want to change that,” he said. “We are currently focused on Tier 2 and 3 cities in China, however, we plan to expand this to Tier 4 and 5 too.”