Ritesh Agarwal recently diversified OYOs business from the hotel and lodging sector to the co-working space by acquiring Innov8. Sources close to the deal suggest that OYO Hotels and Homes paid somewhere 220 crores in order to do so. With this move, OYO plans to open more than 35 new office spaces across various metropolitans in the country. The brand has started two co-working sub-brands known as PowerStation and WorkFlo.
OYO had disrupted the hotel’s industry by offering affordable lodging to consumers. It now plans to do the same to the co-working space by offering affordable workspaces to start-ups. This brand, powered by SoftBank, has already crafted a plan for the year ahead.
Along with this acquisition, OYO has also hired all former Innov8 employees in order to maintain established workflows. These employees will just be working under a different brand name now, which is great because apart from generating future jobs for people, they have also been able to maintain the current jobs of employees.
According to spokespersons who are close to the deal, the first PowerStation workspace will open on Golf Course Extension Road. This sub-brand is aimed towards start-ups that are growing their teams and want managed workspaces. This co-working space will have more than 1,000 seats and will be located in Pioneer Square in Gurugram.
Workflo, on the other hand, is aimed towards transforming the customer support centers, regional offices, sales offices, and also growing startups that are looking for more affordable options. This sub-brand is also ideal for brands that are looking for enterprise solutions that functional and budget-friendly.
With this, OYO is now gearing up to compete with other co-working brands such as WeWork. The latter has more than 287 locations that are spread across 77 cities and 23 countries. OYO’s sales run rate ended at a whopping 1.8 Billion USD in December of last year, putting its growth rate at 4.3X year on year.
OYO has been taking many steps to strengthen its business lately. It recently acquired FreshMenu in order to offer a better dining experience throughout all its properties. It also recently announced the launch of a new sub-brand called Collection O. This foray into the coworking space is a very smart one that aligns with their goals of providing affordable real estate solutions to their clients.
So far, Innov8 and OYO have not commented on this new development. The price paid for the acquisition of Innov8 is also an estimated one that is provided by people who are close to the deal. We’ve got our eye on this mega brand so stay tuned for more.