India's Oyo is bedding down for a lengthy stay in China. Local ride-hailing giant Didi Chuxing has emerged as a new investor in a one billion U.S. dollars funding round, including Japan's SoftBank, which has valued Oyo at five billion U.S. dollars.
A partnership with Didi will give Oyo a lift in its largest market. At the current breakneck pace, Gurgaon-based Oyo, launched in 2013, is on track to become the world's largest hotel brand. It already has over 450,000 rooms across eight countries and is also now rolling into the United States. More than half of its rooms are in China.
Oyo partners with budget to mid-range hotels, operating them under lease agreements or through a franchise. It helps to standardize the rooms and services, and before selling rooms – branded with its distinctive garish red logo – through its website and travel partners.
In China, Oyo competes with Home Inn and Huazhu hotels, which is also a shareholder. Although a handful of Indian startups are pushing aggressively overseas, Oyo is the only one to make a mark in China.
A Chinese partner offers many benefits. One of them is being able to work with a massive distribution platform. Didi, meanwhile, may get a new service to offer users in its battle with rival Meituan Dianping. Customers can book a ride and a room in one place, along with myriad of other things.
The race to become an app-for-everything explains why Singapore taxi-app Grab has also invested in the Indian chain. For Oyo, it may add up to a good stay in China.