OYO Hotels & Homes is “well-capitalised” and will be doubling down on growth in its home market of India. From the ongoing funding round, it plans to invest a fifth, or $200 million, in Asia’s third-largest economy.
The SoftBank-backed company, which is in the process of raising $1 billion (Rs 7,000 crore) from a clutch of investors, doesn’t have any plan to raise further capital.
“Today, we are committing to invest $200 million in India, with the focus on building strong capabilities that will help us further improve the quality of customer experience in India. We will cross leverage this in other markets as well,” he said.
The communique suggests a shift in OYO’s strategy from focusing on profitability — last fiscal year it had cut losses by a third to pushing growth, as the company seeks to achieve a five-year target outlined by Agarwal earlier this month: becoming the world’s largest hotel chain by 2023.
“We will focus on capacity building and look at opportunities for both organic and inorganic growth as long as it helps us in this mission. Rest assured, you will have all the resources and support you need to achieve your goals, make our collective vision for 2023 a reality,” the email mentioned.
The company’s latest missive comes at a time when much of the recent focus has been on its international expansion, particularly in China, Indonesia and Japan.
The decision to double down on India comes at a time when the company has come under attack from the Federation of Hotel and Restaurant Associations of India, which has accused the company of large-scale breach of contracts with hotel operators, jeopardising consumer safety and in violation of laws.
The five-year-old company, which is valued at $5 billion based on its last equity financing round, has vigorously denied the allegations.