India’s budget hotel startup Oyo enters co-working business with million Innov8 acquisition
India’s Oyo has expanded its hotel chain business to over 80 countries and entered co-living spaces segment in recent years. The firm, which has raised about $1 billion in the last two quarters from several big names including Airbnb, has now identified a new business to target: co-working spaces.
The Gurgaon-headquartered firm on Tuesday announced Oyo Workspaces that is already operational across 10 cities in India with over 20 centres. It already has the capacity to serve more than 15,000 people.
At a press conference in New Delhi, Rohit Kapoor, CEO of New Real Estate Businesses, said Oyo plans to have 50 Oyo Workspaces centres by the end of the year and aims to make it the largest co-working business in Asia by the end of next year.
As part of the announcement, Oyo confirmed that it has acquired Innov8, a co-working startup with over 200 employees and 16 operational centres. The four-year-old startup, which had raised about $4 million to date, was acquired for about $30 million, two sources familiar with the matter told TechCrunch.
Innov8 is one of the three in-house brands that is part of Oyo Workspaces. The other two brands — Workflo and Powerstation — are aimed at people who are looking for more economical offering. A user could access one of these co-working spaces for as low as Rs 6,999 ($102) a month. Innov8 has been positioned as a premium option.
The co-working space market is worth about $390 million in India. Kapoor said Oyo believes it can not only become a market leader in the nation but also expand the size of the market itself. Oyo Workspaces will compete with a range of companies including 91Springboard, GoHive, Awfis, GoWork, and the global giant WeWork.
Oyo Workspaces will offer a range of services such as a Wi-Fi connection, in-house kitchen, housekeeping, storage and parking spaces,across all of its centres. It is also offering users monthly monthly and quarterly passes — currently being offered at heavily discounted rates — to further lower the price points of its co-working spaces.
Oyo, which serves more than half a million users each day across more than 850,000 rooms it operates, is aggressively expanding its business through partnerships with local players as it emerges as the third-largest hotel chain in the world. The six-year-old startup was valued at over $5 billion at its last funding round, TechCrunch reported earlier.
Oyo, which serves as both listings and reservations platforms, makes most of its money from fee-paying franchises and bookings. Kapoor said the company will use part of the $200 million Oyo has committed to invest in its India and Southeast Asia businesses this year.