OYO is SoftBank’s Trojan Pig

You build a business over a decade, wading through policy changes, technology upheavals, market disruption, and take your online travel startup from idea to IPO.

Spreading awareness in the market

You educate the market, evangelize the concept, and acquire your nearest competitor to become the veritable 800-pound gorilla in your space, while you watch your nearest peers die or become marginalized in a brutal market.

With such a stellar track record, you couldn’t be faulted for permitting yourself a pat on the back; a sense of having finally “made it”, right?

Not quite.

Because, right now, if you were Deep Kalra, you would be shuffling uncomfortably in your seat, looking nervously over your shoulder at a competitor that has seemingly come out of nowhere to threaten everything that you have worked for.

You would be worried about OYO Rooms.

Founded by Ritesh Agarwal, OYO Rooms is a budget hotel platform with a twist. Rather than just serving as an online aggregator for booking hotel rooms, OYO works with owners to upgrade hotel aspects such as WiFi, linen, and toiletries to meet a prescribed standard that ostensibly offers a consistent standardized experience to guests. These hotels are emblazoned with the OYO brand to signal that promise.

Over the last three years or so, OYO is said to have garnered nearly 150,000 rooms in India spread across 180 cities and claims to have a “70% market share” in its segment.

But surely, seeing a competitor garner traction in one segment in one market shouldn’t be that big a concern, right?

Normally, it wouldn’t be, but OYO is no normal competitor.

OYO recently raised $1 billion to fund expansion all over the globe. This round of funding reportedly valued the company at $5 billion—a valuation that is more than twice that of MakeMyTrip’s own current valuation of $2.4 billion.

But more importantly, OYO is not a normal competitor because it is not just a company. It represents something far larger. It represents a new way to fund and grow startups. It represents a multinational conglomerate SoftBank and its $100-billion Vision Fund.

OYO is SoftBank’s Trojan Pig

What in the world is a Trojan Pig?

A Trojan Horse is a well-known metaphor – a war tactic of using subterfuge to mislead and defeat the opponent by disguising your true intent behind a seemingly benign facade. Unlike this metaphorical construct, a Trojan Pig is a literal dish of the ancient Roman empire.

According to the Roman historian, Macrobius, a Trojan Pig is a boar “made pregnant with other animals and enclosed within as the Trojan horse was made pregnant with armed men.” What kind of animals? Everything from fattened fowl to boiled cockerels to force-fed hares with other assorted knick-knacks like a sow’s udders and fat eels wrapped in pastry added in for good measure.

In ancient orgies, such a Trojan Pig would be the veritable pièce de résistance—the centerpiece of an obscene buffet. OYO is SoftBank’s Trojan Pig.

How so?

Let me count the ways.

Unrestrained gluttony

VC funding has, for long, been about big money. All dreams leading to the seemingly mythical $1-billion unicorn startups. But nothing in the past compares to SoftBank’s Vision Fund. Armed with nearly a hundred billion dollars, SoftBank’s Masayoshi Son has set out to upend VC investing as the world knows it, and in the process, emerge as the most important figure in the world of startup investing and technology in the time to come.

In this quest, SoftBank’s appetite for startups is seemingly insatiable. In less than a year since the fund first started investments, the Vision Fund has already made 42 investments, backing companies such as ride-hailing company Uber, shared workspace WeWork and OYO.


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