OYO Reportedly in Talks to Acquire Rival Treebo Hotels

Post raising massive $1 billion recently, India's budget hotel startup OYO is reportedly in talks to acquire Treebo Hotels, a rival firm also into affordable accommodation segment and headquartered in Bangalore, reported Business Standard citing sources privy to the development.

According to the report, while the acquisition would allow OYO to expand as well as to get an access to talent, for Treebo it will bring growth capital.

Notably, Matrix Partners and SAIF Partners are common investors in both OYO and Treebo.

If this acquisition deal goes through then this will be be the second-biggest deal in the domestic online travel market just after acquisition of ibibo by MakeMyTrip in 2016.

Founded in 2015, by Kadam Jeet Jain, Rahul Chaudhary and Sidharth Gupta, Treebo operates about 10,000 rooms across 400 properties in the country. The brand’s scale is pretty small compared to the scale OYO has managed to achieve with large funds. OYO operates about 8,700 properties in India with a strength of over 164,000 rooms. The numbers continue to expand month after month.

In October, it was also speculated that Treebo and FabHotels -- an another budget hotel brand -- may merge together to have a better scale and stand the growing competition from OYO. Both Treebo and FabHotels have been trying to raise funds in recent months without making much headway. FabHotels, which counts Goldman Sachs as an investor, has raised $35 million till date with last fund raise of $25 million happened in July 2017.

Treebo, which had recently acquired travel startup Events High in May this year, has raised a total of $57 million in funding over four rounds, according to data by Crunchbase. Beside Matrix and Saif, it counts Bertelsmann India Investments, Karst Peak Capital and Hong Kong-based investment firm Ward Ferry Management as its investors.

OYO, on other hand, has acquired three companies to date, with most recent one being of Weddingz in August of this year. Oyo began with one hotel in Gurgaon and has grown to 125,000 rooms in India, where it says it’s tripling year-over-year in terms of transactions. In China, where it began operations last November, it has expanded to 171 cities with 87,000 rooms. It is now in over 350 cities with 211,000 rooms.

Treebo Appoints ex-Amazon Executive Pradeep Sriram as Head of Finance

Treebo Hotels, India’s largest budget hotel chain, has appointed ex-Amazon executive Pradeep Sriram as its new Head  of Finance. In this role, Pradeep will be heading all commercial, accounting, tax, compliance, receivables, and payables related activities. Pradeep’s appointment is significant given it comes at a time when Treebo has embarked on a journey towards EBIDTA profitability over the next 18-24 months.

In his last stint, Pradeep was part of the  Global Account Receivables and Global Payroll teams at Amazon. At Amazon, Pradeep was also actively involved in designing and implementing process and technology related initiatives within the Finance function. Prior to joining Amazon, he worked with Wipro Technologies for close to 8 years where he headed the Finance function for multiple Business Units with annual revenues of $500M+. At Wipro,Pradeep was instrumental in improving the operating margin of his business unit as well as contributing to large deal wins .

Commenting on his new role at Treebo Hotels, Pradeep Sriram said, “Treebo has a unique business model, which consistently delivers customer delight, impeccable quality and value to its customers. In a short span of 2 years, the company has become the 3rd largest Hotel chain in the country. What’s even more exciting to me as a finance professional is the fact that Treebo is being built on solid fundamentals and the team is committed to sustainable economics. I’m excited about this opportunity, as we embark on a journey to become the country’s largest and most profitable hotel chain over the next few years.”

Sidharth Gupta, Co-Founder, Treebo Hotels said, “Pradeep comes with a broad experience of over 15 years across established firms like Amazon and Wipro. He has demonstrated expertise in driving margin improvements as well as tech-based process improvements in his previous roles. This experience will be valuable to us as we enter the next phase of profitable growth at Treebo. We are excited to have him at Treebo.”

Pradeep is a Qualified Chartered Accountant, Certified Fraud Examiner from ACFE, US (Association of Certified Fraud Examiners, USA), Associate Member of CPA, Australia and Associate Member of ISACA (Information Systems Audit and Control Association).

Founded in June 2015, Treebo Hotels is brainchild of ex-McKinsey consultants Sidharth Gupta and Rahul Chaudhary, and ex-VP engineering of MyGola Kadam Jeet Jain. Treebo Hotels offers quality accommodation in the unorganized and fragmented budget segment which is $20 billion in market size. The company is the largest network of branded budget hotels with 6000 rooms across 250+ properties in over 50 major cities.

Treebo Hires Ex-Yahoo Exec Khilan Haria as Head of Product

Treebo Group of Hotels, the Bangalore-based chain of tech-enabled budget hotels, has appointed ex Yahoo executive Khilan Haria as their Head of Product. Prior to joining Treebo, Khilan was working as Head of Product at Teabox, a vertical ecommerce company focused on premium tea, where he was instrumental in launching several products including subscription program and machine-learning backed recommendations engine.

Khilan has also worked at Yahoo India for 3 years. There he led Yahoo's flagship e-commerce platform, Yahoo Stores, which hosted 40,000+ online sellers, and processed $3B+ in yearly sales.

"Treebo is a 'digital hotel'. We work with the heart of a hotelier, and the mind of an engineer. Building cutting-edge technology products is core to our success as a pioneering budget hotel brand. Therefore, we are excited to welcome Khilan into our team. His vast experience in building industry-defining products will be a huge asset for us in accomplishing this objective", said Sidharth Gupta, co-founder of the company.

Khilan is an alumnus of Indian School of Business Hyderabad and National Institute of Technology Durgapur. He started his career in engineering at Cisco Systems and also worked as a Product Manager at Taggle, a group-buying start-up in 2011.

"There is a huge opportunity to use technology to revolutionise the hospitality industry. This space hasn't seen as much innovation as some other spaces like retailing, food delivery, taxi, etc. I am excited about working with the stellar team at Treebo to build some such game-changing products", said Khilan Haria.

Treebo recently raised $17M in a fresh round of funding from Bertelsmann India, Matrix Partners, and SAIF Partners. Hiring experienced technology and product professionals is part of the company's effort to use these fresh funds for strengthening their technology leadership in this space.