NEW YORK -- SoftBank Group-backed Indian startup Oyo Hotels & Homes has bought Hooters Casino Hotel, its first property in Las Vegas as it eyes further expansion in the U.S. market.
The deal, announced by Oyo Friday, was handled by its American partner Highgate, which will oversee operations at the rebranded Oyo Hotel & Casino.
The two companies paid $135 million for the property, said a person familiar with the matter.
The hotel is located near the city's tourist hub, the Las Vegas Strip, and has 657 rooms across 19 floors, as well as a 35,000-square-foot casino.
The new addition marks the budget chain's foray into a higher-end segment of the U.S. hotel market, as it adapts to a business environment different from home.
Founded in 2013 by then 19-year-old Ritesh Agarwal, Oyo has a portfolio comprising over a million rooms -- compared with 140,000 just a year ago -- across 23,000 hotels and 125,000 vacation homes. It grew to its current scale by reforming independently run, and often underdeveloped, budget accommodation with standardized design and practices, operating them under its brand.
The startup has raised funds from investors including Airbnb and Sequoia Capital, apart from Softbank's Vision Fund.
Oyo also provides apps that range from booking rooms to managing a hotel, and has developed algorithms that calculate a hotel's projected occupancy rates and revenue.
In June, Oyo announced its plan to invest $300 million in the U.S., where it operated dozens of hotels. But some raised concerns over whether Oyo could adapt its approach, which has achieved huge success in developing countries, to the American market.
"With our newest hotel in Las Vegas, we are excited to cater to a completely different audience segment and are certain that this will be the perfect start to OYO’s journey in Las Vegas," Oyo CEO Agarwal said in a statement Friday.
Abhinav Sinha, COO and partner at Oyo Hotels & Homes USA, said the company is "increasingly exploring new ways to connect with our customers, from millennials, to young executives and families, in every city we enter."
Positioned as a flagship property for the Indian chain, the Las Vegas hotel will be renovated to reflect Oyo's brand, which is expected to be completed this year. Paragon Gaming will continue to operate the casino.