SoftBank partners with India's Oyo in move for more oversight

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[SAO PAULO] SoftBank Group is taking a direct role in managing its virus-hit hospitality startup Oyo's operations in Latin America through a joint venture which will control all hotels in the region, the head of Oyo Brazil told Reuters in an interview on Friday. Read more at The Business Times.

SoftBank has taken a big writedowns on bets including shared office space company WeWork and wants to avoid a similar fate with Oyo, in which it has invested over US$1 billion, said one of the sources who is directly familiar with SoftBank's thinking.An Oyo spokesperson 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".

SoftBank's Latam fund has invested US$75 million into Oyo's business in the region, said a source with knowledge of the matter."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," Mr Weaver said. Once among the world's largest hotel chains by room count, Oyo has furloughed hundreds of employees in the United States and Europe and shuttered offices in other global markets. In India and China it began cutting costs and headcount as early as January.Oyo had committed to invest over US$600 million in China but in recent months the company has seen an exodus of executives and a shrinking footprint while also battling lawsuits filed by hotel partners and vendors over non-payment of dues.

 

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