India’s Oyo has expanded its hotel chain business to more than 80 countries and entered the co-living spaces segment in recent years. The firm, which has raised about $1 billion since last September from several big names, including Airbnb, has now identified a new business to target: co-working spaces.
The Gurgaon-headquartered firm on Tuesday announced Oyo Workspaces, which is already operational across 10 cities in India with more than 20 centres. It currently has the capacity to serve more than 15,000 people. More than 6,000 employees from firms such as Swiggy, Paytm, Pepsi, Nykaa, OLX and Lenskart have already signed up for the service.
At a press conference in New Delhi, Rohit Kapoor, CEO of New Real Estate Businesses, said Oyo plans to have 50 Oyo Workspaces centres by the end of the year and aims to make it the largest co-working business in Asia by the end of next year.
As part of the announcement, Oyo confirmed that it has acquired Innov8, a co-working startup with more than 200 employees and 16 operational centres. The four-year-old startup was acquired for about $30 million, two sources familiar with the matter told TechCrunch.
Innov8 is one of the three in-house brands that is part of Oyo Workspaces. The other two brands — Workflo and Powerstation — are aimed at people who are looking for economical offering. A user could access one of these co-working spaces for as low as Rs 6,999 ($102) a month. Innov8 has been positioned as a premium option.
India’s co-working space, still a relatively new business category locally, is worth $390 million — a fraction of the $30 billion office and commercial real estate business. Kapoor said Oyo believes it can not only become a market leader in the nation but also expand the size of the market itself. Oyo Workspaces will compete with a range of companies, including 91Springboard, GoHive, Awfis, GoWork and the global giant WeWork.
Oyo Workspaces will offer a range of services across all of its centres, such as a Wi-Fi connection, in-house kitchen, housekeeping, storage and parking spaces. It is also offering users monthly and quarterly passes — currently being offered at heavily discounted rates — to further lower the price points of its co-working spaces.
Oyo, which serves more than half a million users each day across more than 850,000 rooms it operates, is aggressively expanding its business through partnerships with local players as it emerges as the third-largest hotel chain in the world. The six-year-old startup was valued at more than $5 billion at its last funding round, TechCrunch reported earlier.
Oyo, which serves as both listings and reservations platforms, makes most of its money from fee-paying franchises and bookings. Kapoor said the company will use part of the $200 million Oyo has committed to invest in its India and Southeast Asia businesses this year.