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SoftBank-backed OYO buys @Leisure Group in biggest overseas deal by an Indian startup
Photo Credit: VCCircle

OYO has acquired a majority stake in European vacation rental company @Leisure Group from German media house Axel Springer SE, as the Indian hospitality chain deepens its global presence after raising more than $1 billion from investors including Airbnb.

“We see vacation homes as a unique opportunity with 115,000 units of homes now getting added to our already growing count of beautiful homes," Ritesh Agarwal, OYO's founder, said in a statement.

Axel Springer said in a statement it will now focus more on the activities of the StepStone Group and AVIV Group in the classifieds media segment.

Axel Springer will receive a total of about €180 million, including the repayment of a shareholder loan of around €60 million. The total volume of the transaction has an EBITDA multiple of more than 15 for 2018, it said.

It didn't disclose the total deal value but TechCrunch reported that the amount was about $415 million (€369.5 million).

The @Leisure Group is an online platform for holiday homes in Europe. Its offerings include the full-service providers Belvilla and DanCenter as well as the online holiday home marketplace Traum-Ferienwohnungen.

OYO, which was founded in 2013, has been on an expansion spree since announcing its $1 billion round of fundraising in September last year. It completed the fundraise in February after it received $100 million from Chinese ride-hailing company Didi Chuxing. 

SoftBank, Singaporean ride-hailing company Grab, Lightspeed Venture Partners, Sequoia Capital and Greenoaks Capital had contributed the initial $900 million to the round, which valued OYO at $5 billion. This was followed by Airbnb's investment in OYO in April. 

OYO operates more than 18,000 franchised and leased hotels in more than 500 cities across 10 countries including India, China, Malaysia, the UK, the UAE and Indonesia.

This is at least the fourth acquisition by OYO over the past year. 

In March last year, OYO had acquired Chennai-headquartered service apartment company Novascotia Boutique Homes in its first takeover.

In July, it had bought Mumbai-based Internet of Things (IoT) technology company AblePlus Solutions Pvt. Ltd to bolster its technology portfolio.

In August, OYO took over Weddingz.in, an online marketplace for wedding venues and vendors.

The company had recently strengthened its top deck by making a slew of appointments with an aim to expand across different regions. The company appointed Andrew Verbitsky as the head of its European operations, Sam Shih as its chief operating officer for China, Jeremy Sanders as the UK head and Tan Ming Luk as the head for Malaysia. Verbitsky has had stints at Airbnb and Delivery Hero across Europe and Asia.

Earlier, the company had appointed Aditya Ghosh, former president of budget carrier IndiGo, as chief executive officer to head its operations in India and South Asia.

OYO reported a three-fold rise in operating revenue to Rs 415.8 crore and flat losses even as gross expenses rose nearly two-fold for the year through 31 March 2018.

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