MUMBAI -- Home-sharing platform Airbnb has invested in Indian hotel startup Oyo, which has quickly built a presence in India and China -- two markets where the U.S. company wants to grow.
This investment, confirmed by California-based Airbnb and Oyo on Monday, is reportedly worth $100 million to $200 million and was part of a funding round announced in September.
Oyo, founded in 2013, aggregates hotels onto a booking website that helps them improve efficiency.
Both companies are exploring ways to collaborate, including making Oyo accommodations available on Airbnb. Besides India and China, Airbnb also targets Southeast Asia, another front for expansion by Oyo.
"Emerging markets like India and China are some of Airbnb's fastest-growing, with our growth increasingly powered by tourism to and from these markets," Airbnb's president of homes, Greg Greeley, said in a statement. "In many of these markets, Oyo is empowering local hospitality entrepreneurs to provide more options to more travelers."
Oyo said the partnership was not exclusive and that the company would work with other platforms.
"Airbnb's strong global footprints and access to local communities will open up new opportunities" for Oyo, said Maninder Gulati, the Indian company's global chief strategy officer.
Valued at $5 billion, Oyo claims to be the world's seventh-largest hotel group, with 515,000 rooms under management. It aims to overtake top-ranked Marriott International, which manages 1.29 million rooms, by 2023.
The Indian unicorn is also branching out into new services such as rental housing, a business it took global last week in Tokyo.
Oyo also has footholds in Malaysia, Nepal, the U.K., the United Arab Emirates, Indonesia, Saudi Arabia and the Philippines, with over 18,000 franchised or leased hotels in its chain and more than 6,000 homes. More than 90% of sales come from repeat customers or word of mouth, according to the company.
N. Chandramouli, chief executive officer of TRA Research, says the investment by Airbnb is a smart move given Oyo's fast growth.
"For Airbnb to grow, [it] has to be present across segments," Chandramouli said. "Airbnb cannot remain just a platform."
The investment "is like an expansion for Airbnb," Chandramouli added. "By investing here, it is coming to hotel rooms, too."
Airbnb claims its listings have grown 150% to around 45,000 since 2016, hosting 1.25 million travelers during the period.