- Softbank Group partnered with OYO Rooms to operate 1000 hotels in Brazil and Mexico region
- Japanese investment firm Softbank will use Latin America funds to invest in the newly formed OYO Rooms subsidiary OYO Latam.
- SoftBank will invest in OYO Latam through its $5 Billion Latin America fund.
Softbank, the biggest stakeholder in OYO Rooms partnered with OYO Rooms to control over 1000 hotels in Brazil and Mexico under OYO Latam.
Japanese Softbank group will invest in the newly formed OYO Rooms subsidiary OYO Latam through its $5 billion Latin America funds.
The move comes as OYO Rooms valued at $10 billion in its most recent fundraising round, has been forced to cut costs and rein in its expansionist strategy in global markets by reducing its hotel footprint and laying off its employees after revenues took a hit from the COVID-19 pandemic.
Back in 2015, Softbank group first invested in OYO Rooms and has been the biggest stakeholder till now. Softbank is looking to grow OYO Rooms global business by investing in different regions.
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Furthermore, Softbank will direct the OYO Rooms operations in Latin America through a joint venture which will be controlling hotels and its operations in the region. said, OYO Brazil head, Henrique Weaver.
Although the amount of the investment has not been disclosed by the Weaver but said both of these companies will have equal representation on the board.
According to Reuters, The move of the Japanese Softbank group shows that the firm is ensuring that Indian companies would remain on track on the global markets after post-COVID-19.
An Oyo spokeswoman said Softbank is like any other investor in the company with a seat on the board and that Oyo is "a management-run and a board-governed company."
"Any description that Oyo is being managed, or there is any 'additional oversight' (formal or informal) or otherwise is merely media speculation and completely untrue," the spokeswoman said.
Moreover, Softbank already said that they have started the partnership with OYO Rooms in Latin America since 2019 and the amount of the investment has been recently changed due to the COVID-19 pandemic.
Due to the COVID-19 pandemic, Softbank Group has transformed its investment in OYO Rooms and its global subsidiaries.
"Latin America has proved to be a good fit for Oyo, with a super-fast growth pace because the hotel market is extremely fragmented in the region," Weaver said.