In September, India-based budget hotel chain OYO announced that it was raising $1 billion in new funding led by Softbank’s Vision Fund. Today, reports surfaced that Singaporean ride-hailing giant Grab has contributed $100 million to that effort.
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As Alex Wilhelm mentioned in our coverage of the $1 billion round, the infusion from Softbank wasn’t the first time that the company piqued the investor’s interest. Softbank first led OYO’s $100 million Series B in July 2015. Grab is itself one of Softbank’s portfolio companies. The investment group has funneled hundreds of millions into the company, including in the Grab’s $2 billion Series G in July 2017 that was co-led by Didi Chuxing (another Softbank company) and Softbank Vision Fund.
The infusion from Grab brings the total raised capital in the ongoing $1 billion round to $900 million, and its total funding over time to almost $1.5 billion, according to Reuters and the Economic Times. Take a look:
Why Grab would invest in OYO is an interesting question. The answer to which we can only speculate. When OYO initially announced its intent to raise $1 billion, the company mentioned that it planned to double down on its growth in India and China, while also expanding to other international markets including Southeast Asia.
Grab, if you’ll recall, is in an increasingly capital-heavy battle with Indonesia-based ride-hailing service Go-Jek, which is reportedly raising up to $1.5 billion in a funding round of its own. Notably, Go-Jek made a concerted effort to become Indonesia’s online to offline superapp, and offers everything from package delivery to massage and hair appointments. It is now expanding into other areas of Southeast Asia.
Grab, on the other hand, had focused primarily on differentiating its ridesharing services, but has started moving into superapp territory. The company has recently introduced a payments platform, grocery delivery, and other services. Also, in July, Grab officially announced the launch of GrabPlatform as part of its effort to partner with companies in different sectors. If Grab plans to move into the hotel sector, partnering with a growing, capital-backed company with eyes on its home market could be a smart strategic move.
Illustration Credit: Li Anne Dias