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Oyo sets aside €300 million for its vacation rental business

The firm intends to drive deeper into Europe with the investment that may also see Oyo, through its Oyo Vacation Homes business, take on Airbnb.

ET Bureau|
Aug 15, 2019, 07.59 AM IST
The Ritesh Agarwal-founded company has claimed that Oyo Vacations is the world’s third-largest vacation home brand.
NEW DELHI: Oyo Hotels and Homes has committed €300 million (about Rs 2,400 crore) towards its vacation rentals business, signalling the SoftBank-backed company’s intention to drive deeper into Europe and possibly take on global leader Airbnb.

Oyo’s announcement comes three months after the Gurgaon-headquartered company acquired Amsterdam-based vacation rental company @Leisure from German media group Axel Springer, for a reported $415 million, which was later renamed Oyo Vacation Homes. The all-cash deal was also Oyo’s largest and most prominent international acquisition till date.

Airbnb, the world’s largest shortterm rental and experiences company, is also an investor in Oyo, having participated in the latter’s $1.1-$1.2 billion funding round. Oyo said in a statement that it would focus on building the largest vacation rental management service business in Europe, managed under Oyo Home, Belvilla, Danland, and Dancenter brands.

“To support our vision towards becoming the largest full-service vacation rental business, we will make significant investments to expand our footprint in the market,” Tobias Wann, CEO of Oyo Vacation Homes, said.

Investments into the Vacation Rental management services will also come with more resources for the vacation home business in Europe. With offices in Switzerland, Spain, Italy, Netherlands, France and cities across Europe, the teams will support the growth of the vacations business across identified regions, it said.

“Globally, vacation rentals represent a massive multi-billion euro opportunity, the largest of which is in Europe,” Maninder Gulati, chief strategy officer at Oyo, said.

The Ritesh Agarwal-founded company has claimed that Oyo Vacations is the world’s third-largest vacation home brand, with over 125,000 homes, across more than 800 cities, and in 80-plus countries, spread across Europe, Asia and North America.

“With a goal of becoming the largest vacation rentals business in Europe, Oyo Vacation Homes will continue to make significant investments in resourcing and manpower towards growing its existing footprint in the market,” Wann said.

The move also comes less than a month after ET reported that Japanese financial groups Mizuho and Nomura Holdings were the principal lenders that financed Oyo Group CEO Ritesh Agarwal’s buyback of shares in the company.

The two are part of a three-member Japanese consortium that is funding Oyo founder Ritesh Agarwal to buy back his company’s shares worth $1.5 billion from early investors such as Sequoia Capital and Lightspeed Venture Partners — the biggest buyback by an Indian founder till date — and also invest another $500 million into the company.

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