After raising a massive $1 billion in recent times, India’s budget hotel startup OYO is reportedly in talks to get hold of Treebo Hotels, a competitor firm also into affordable accommodation segment and headquartered in Bangalore, as reported by Business Standard citing sources privy to the development.
As per the report,the acquisition would let OYO to expand further and get an access to talent simultaneously,Treebo will bring growth capital.
Matrix Partners and SAIF Partners are common investors in both OYO and Treebo.
If this acquisition deal become successful,then this will be be the second-biggest deal in the domestic online travel market second to the acquisition made by MakeMyTrip acquiring Ibibo in 2016.
Founded by Kadam Jeet Jain, Rahul Chaudhary and Sidharth Gupta in the year 2015, Treebo operates around 10,000 rooms across 400 properties across the country.The brand’s scale is pretty small compared to OYO which has managed to achieve with large funds. OYO operates about 8,700 properties in India with a strength of over 164,000 rooms. The numbers expanding steadily month after month.
It was under speculation that Treebo may merge together with FabHotels — an another budget hotel brand to have a better scale and compete well with the growing competition from OYO. Both Treebo and FabHotels have been trying to raise funds in recent months without making much headway. FabHotels, which counts Goldman Sachs as an investor, has raised $35 million till date with last fund raise of $25 million happened in July 2017.
According to data by Crunchbase Treebo had recently acquired travel startup Events High in May this year, has raised a total of $57 million in funding over four rounds,. Beside Matrix and Saif, it counts Bertelsmann India Investments, Karst Peak Capital and Hong Kong-based investment firm Ward Ferry Management as its investors.
On the other side, OYO has acquired three companies till date, with most recent one being of Weddingz in August this year. Started with one hotel in Gurgaon,OYO has now grown to 125,000 rooms in India, where it says it’s tripling year-over-year in terms of transactions. In China, it started operations in last November.Now it has expanded to 171 cities with 87,000 rooms. It is now spread across 350 cities with 211,000 rooms.
