SoftBank, others tip $100M to Indian marketplace for budget hotels

India’s OYO Rooms, a marketplace for budget hotels, today announced that it secured US$100 million led by the SoftBank Group. The startup has previously raised US$25 million from US-based Greenoaks Capital, Sequoia Capital, and Lightspeed India. All the existing investors also participated in this round.

Although the startup is an aggregator that does not own the listed rooms, they are called OYO Rooms on the website with a description of amenities and location, but no mention of hotel names. It’s like an Uber for hotel rooms – the customer is promised a certain level of service without much information on the owner of the property. That makes it very different to Airbnb.

“We want to solve the problem of lack of predictability of experience across hotels in the country. Our vision is to provide a standardized experience,” says OYO Rooms founder Ritesh Agarwal. He was a teenager when he launched the company three years ago. He was selected for the 20 Under 20 Thiel Fellowship, instituted by venture capitalist Peter Thiel to encourage teenagers to explore alternatives to college.

Across 70 cities

OYO has aggregated unbranded hotels from tourist places like Jodhpur, Coorg, and Mount Abu, as well as major cities like Mumbai, Delhi, and Bangalore. The startup claims to have an inventory of 12,000 rooms from 70 cities across India.

OYO will use the latest round of funding to “implement new customer experience initiatives, build innovative technology products, and marketing.”

Through its booking app, OYO not only allows booking rooms but also ordering beverages and requesting room service. It provides a tablet-based property management app to hotel owners who partner with OYO Rooms.

OYO competes with budget accommodation provider Stayzilla, which has a hybrid model: it has something for everyone, from hotels, homestays, and peer-to-peer rentals à la Airbnb to guest houses, jungle lodges, and even boat houses. It raised US$20 million in a series B round earlier this year.