India's VC-backed Oyo Rooms acquires rival Zo Rooms

SoftBank listed the transaction in its most recent earnings report without specifying the deal value. Livemint reported Oyo Rooms acquired Zo Rooms through an all-stock swap, which came after Zostel Hospitality - the operator of Zo Rooms - failed to raise a new round of funding from investors.

Oyo Rooms was launched in 2012 as Oravel.com, a marketplace for boutique hotels and serviced apartments for short- and mid-term holiday rentals. However, the original site shut down in 2014 and was replaced by Oyorooms.com.

Oyo Rooms operates a business model comparable to taxi-booking platform Uber, with small teams of 20 people in charge of each city, and a large centralized customer care center accounting for the bulk of its 1,200-strong workforce. The company is active in 165 cities in India and recently entered Southeast Asia. It reported 895,000 used room nights in the third quarter of 2015, a 34-fold year-on-year increase, SoftBank said.

Oyo Rooms received its initial seed round in 2012 from a group including eight angel investors. Then in May 2014 it raised $650,000 from DSG Consumer Partners and Lightspeed Ventures India.

In March last year, the company secured INDR1.5 billion ($24 million) in a round led by Greenoaks Capital, with participation from Lightspeed, Sequoia Capital and DSG. Five months later, SoftBank led a $100 million Series B round. Existing investors Greenoaks, Sequoia and Lightspeed also took part.

Zo Rooms claimed to cover about 400 hotels in 30 cities in India. Tiger Global and Orios Venture Partners provided a Series A round for Zostel Hospitality in July of last year.

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• Topics
• South Asia
• Venture
• Buyouts
• Consumer
• Technology
• India
• Softbank
• M&A
• TMT
• Sequoia Capital
• Tiger Global Management