Masayoshi Son, often referred to as the big daddy of the investment world, addressing analysts in August in Tokyo said, “The world’s biggest hotel chain is Marriott. And how many monthly net room additions? 8,000. Hilton, the second biggest, added 7000; and Intercontinental, the third biggest hotel chain in the world, 2,000.”
This was just the context. He then mentions Oyo, the five-year-old Gurugram-based hotel chain founded by wunderkind Ritesh Agarwal. He is still 24 and has already spent half a decade setting up the business. “Oyo is less than a year old in China, and has added 25,000 rooms over the past two to three months,” said Son.
The 61-year-old sounds happy with the company in which he invested $512 million over the past five years. In September 2018, he led another financing round of $800 million in Oyo, which raised $1 billion from existing investors, including Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital. The recent round valued Oyo at $5 billion — an over 5x jump from its previous valuation of $900 million last year. The valuation is more than twice that of Indian Hotels, the country’s largest hotel chain. No wonder then that Son and other investors are optimistic about Oyo’s prospects.
Oyo quietly entered China in November 2017 but formally announced its foray in June 2018. “In less than a year of entering the Chinese market, we’ve added over 87,000 rooms and 1,000 exclusive hotels to our chain. We are present in 26 Chinese cities, offering a combination of franchises and managed hotels,” says Agarwal. The room count puts the start-up among the top 10 hotel chains in China, where Home Inn is at the top with nearly 400,000 rooms. The cities it operates in include Hangzhou, Xi’an, N