TOKYO -- Oyo Hotels, the Indian budget hotel operator and one of the country's biggest startups, is moving into Japan with a rental apartment service targeting millennials.
Oyo Technology & Hospitality Japan, a joint venture between Oyo and Yahoo Japan, on Wednesday said it will launch a service in early March that will enable users to find, rent and leave apartment rooms using a smartphone app.
In Japan, homes are usually rented out unfurnished and tenants need to purchase furniture and appliances on their own. Oyo's service, dubbed Oyo Life, aims to eliminate the hassle, offering units that are fully furnished and come equipped with Wi-Fi and utilities like water and electricity.
Oyo also said it will not charge brokerage fees or additional fees like security deposits, which are common practice in Japan's rental market. The company is targeting 1,000 listings in Tokyo's prime areas by the end of March. It said monthly rental prices will range from 20,000 yen ($180) to 800,000 yen.
Oyo's core business is managing a network of budget hotels. Since its establishment in 2013, the fast-growing startup now handles 13,000 hotels in eight countries including China and the U.K. It has catered to young, budget-focused travelers by streamlining the fragmented lodging industry through smartphone technology and standardized services.
The company has recently utilized its know-how to expand into the housing market. Oyo Living, launched in October, is a rental service for fully furnished houses in Bangalore and other Indian cities.
The so-called co-living market is becoming popular in India and other Asian countries, as the younger generation opts to rent rather than buy. But the market is virtually nonexistent in Japan.
"We believe that we can provide rental housing experiences of high value to Japanese customers by making full use of the know-how gained in the hotel business," Oyo CEO Ritesh Agarwal said in a news release.
People familiar with the matter told the Nikkei Asian Review that the launch of the rental apartment service marks the first overseas foray of Oyo Living. The company has "big plans" for introducing the hotels business in Japan in the future, the people said.
Oyo will own 66.1% of the joint venture. It appointed as CEO Hiro Katsuse, the former head of Handy Japan, which offers a smartphone rental service to hotels.
Oyo secured $1 billion in funding from the SoftBank Vision Fund and other existing investors in September. The deal reportedly gave the company a valuation of $5 billion, making it one of the top unicorns -- private companies valued at $1 billion or more -- in India.
Yahoo Japan, an affiliate of SoftBank Group, is trying to expand beyond online based businesses like advertising by providing services to offline industries. It has rolled out smartphone payment app PayPay, which uses technology from Indian fintech unicorn Paytm.
Nikkei staff writer Rosemary Marandi in Mumbai contributed to this story