Oyo Rooms to Acquire Zo Rooms in an All-Stock Deal

Oyo Rooms to extend its dominance in the budget hotels market by acquiring Zo Rooms in an all-stock deal.

Oyo Rooms raised $100 million (Rs 630 crore) in August from Japan’s SoftBank Corp, Sequoia Capital, Lightspeed Venture Partners and Green Oaks Capital, at a valuation of $400 million. (Photo: iStockphoto)

Oyo Rooms is on its way to extend its dominance in the budget hotels market by acquiring Zo Rooms in an all-stock deal.

According to a report by The Economic Times, the deal will give Zo Rooms’ seven founders and investors a combined 7% stake in India’s largest budget hotels’ aggregator.

The deal was struck after Zo Rooms was unable to raise fresh capital from investors. The report said that Zo Rooms’ assets included its technology and a network of 11,000 rooms in 1,000 hotels across 50 cities and towns in India, though Oyo will not be taking liability for Zo’s dues.

The deal also comes two months after India’s largest online travel agencies, including MakeMyTrip and Goibibo, blocked budget-hotel aggregators such as Oyo Rooms and Zo Rooms from listing and marketing hotel properties on their websites.

Oyo Rooms raised $100 million (Rs 630 crore) in August from Japan’s SoftBank Corp, Sequoia Capital, Lightspeed Venture Partners and Green Oaks Capital, at a valuation of $400 million. The company has 30,000 rooms in more than 3,000 properties across 130 cities and towns in India. It was making four lakh room bookings a month in August.

Earlier this year, India’s largest cab aggregator, Ola, bought out smaller rival TaxiForSure for about $200 million in March, gaining a huge leap over US-based Uber in India.