India-based online budget hotel booking venture OYO Rooms has made its entry into international markets with a launch in Malaysia.
According to Founder and CEO Ritesh Agarwal, higher-than-average mobile penetration and a large Internet population makes Malaysia an attractive market for OYO.
“OYO’s model is suitable for markets with a large share of unbranded budget supply such as Southeast Asia, Africa and South America,” he said.
The startup was launched in 2013 by Agarwal, India’s first graduate of the Thiel Fellowship (a programme started by Paypal Founder Peter Thiel). It’s a branded network of hotels spread across 166 cities in India with over 4,000 hotels in its network. The firm covers almost all cities in the country.
OYO is reportedly in talks to acquire smaller rival and Tiger Global-funded Zo Rooms. Other players in the budget hotel booking segment are ZiP Rooms, Wudstay, Vista Rooms and QiK Rooms.
In August last year, OYO raised US$100 million in funding led by Japanese Internet conglomerate SoftBank. This was in addition to a US$24 million funding led by Greenoaks Capital Partners in May that year.
Prior to that, the startup had raised US$650,000 from DSG Consumer Partners and Lightspeed Venture Partners in May 2014.
Malaysia is one of the fast-growing markets in Southeast Asia. As of November 2015, Malaysia had 30.8 million population, of which 20.6 million use Internet. Surprisingly, the mobile penetration in the country is a massive 140 per cent, higher than the US and Indonesia. People in the country are increasingly using smartphones to connect to Internet.