Microsoft and Oyo have entered into a multi-year strategic partnership to collaborate on “next generation” products and technology in travel and hospitality.
Thursday’s announcement confirms a late July TechCrunch report. TechCrunch reported earlier that Microsoft had been in discussions to invest in Oyo, and was looking at ways it could provide its technology to Oyo’s Indian startup. Oyo is one of South Asia’s most important markets.
Microsoft stated in a statement that Oyo had also been the subject of a strategic equity investment. However, it did not disclose the exact amount. A regulatory filing showed last month that the Windows-maker had invested $5 million in the Indian startup. Oyo was valued at $9.6B.
According to the companies, Oyo will move to Microsoft Azure to meet its cloud-based requirements and work with Microsoft to co-develop solutions to benefit patrons of small- and medium-sized hotels and home stores. OYO and OYO have partnered to create Smart Room experiences on OYO’s platform. These experiences will include premium, customized experiences in the rooms for their guests. The experience, which will be powered by Microsoft Azure IoT technology, includes self-check in with a digital register for arrivals and departures as well as self-Know Your Customers (KYC), smart locks that can be managed IoT-managed and virtual assistance.” the companies stated.
Anant Maheshwari (President of Microsoft India), stated that “Combining Azure’s power with OYO’s tech and product stack, we look forward to driving innovation in travel, hospitality, and other industries.” It is amazing to see the Microsoft cloud empowering digital natives such as OYO to speed industry transformation and innovation, turning the post-pandemic challenges into opportunities.
Oyo is now one of the most prominent hotel chains worldwide, having locations in India, Southeast Asia and Europe. But some of its missteps in its pursuit of aggressive expansion — “toxic culture,” lapse in governance and relationship with many hotel owners — have scarred its growth.
The pandemic struck just as Oyo was promising to strengthen its relationships with hotel owners. In response, Oyo slowed its growth and laid off thousands of employees globally earlier this year as nations across the world enforced lockdowns.
Ritesh Agarwal, CEO of the startup that was seven years old, said Bloomberg TV in July that the pandemic struck like a “cyclone”. He said that the company had been working on something for many years, and the drop in 60% took only 30 days. The firm has not yet made a decision to explore the public markets.
Agarwal stated that Oyo, which is backed by Airbnb, had $780m to $800m in its bank and had reduced its monthly burn to between $4 million and $5 million across all its businesses. (The startup had about $1 billion in the bank in December 2020.)
Oyo announced that it had taken $660 million of debt in July, following Agarwal’s comments at the conference. According to someone familiar with the matter, that debt was used for the repayment of previous debt.
Microsoft’s latest strategic investment in Oyo was one of many made by the company. A handful of South Asian startups have been supported by the firm, such as DailyHunt (news aggregator, short-video platform), Flipkart (e-commerce company) and FarEye, logistics SaaS provider.
Publited at Thu, 9 Sep 2021 09.34:42 +0000