OYO, India's newest unicorn is certainly going places. Just weeks after announcing plans to foray into the UK and raising $800 million in a round led by Softbank Vision Fund, the hospitality company is reportedly readying to say Kon'nichiwa, or hello in Japanese.
Sources told The Economic Times that the Gurgaon-based company, now valued at $5 billion, is piloting a couple of properties in the capital city of Tokyo, with a formal entry into the world's third-largest economy expected to take place over the next 3-6 months.
In a statement after its latest financing round, OYO had said that it plans to channel approximately $600 million of the funds raised into "strengthening its position in China" and the rest to consolidate its leadership position in India while expanding its footprint.
In the past year, OYO increased its international footprint to four countries - China, Malaysia, Nepal and, more recently, the UK. In less than a year since it forayed into China, the company already has about 87,000 rooms across 171 cities. In total, it claims to be present in over 350 cities with over 10,000 asset partners.
Although OYO's 24-year-old founder Ritesh Agarwal previously told the daily that the plan was to focus on international markets such as Southeast Asia and the UK, sources said that Japan could be the company's next major market, after India and China, where it launched operations last December.
After all, Japan is not only the home market for OYO's single-largest stakeholder, SoftBank, but it will also host the 2020 Summer Olympic Games. With this move the company hopes to tap the anticipated growth in the country's hospitality sector over the next two years. According to a May report by global real estate-focused consultancy Jones Lang LaSalle, accommodation accounts for average 28% of tourist spend (on average) in Japan - second only to shopping - and room occupancy has been going up.
The buzz is that OYO has already started hiring people to handle the Japan operations. Meanwhile, back home, the company already boasts over 1.25 lakh rooms across the country and is witnessing more than three times growth year on year with net take rates of over 20%.Agarwal, incidentally, was the youngest self-made entrepreneur on the recently-released Barclays Hurun India Rich List for 2018.