OYO, a hospitality chain, has acquired Innov8, a Gurugram-based coworking startup, for approximately INR 220 crore (approximately $31.84 million) in an all-cash deal. Innov8 founders and investors have exited as part of the transaction.
Innov8 founder Ritesh Malik will lead the company's expansion under OYO. The Innov8 team will remain intact. OYO plans to expand Innov8's capacity to 10,000 coworking seats across India.
Innov8, a Y Combinator graduate (2016), has raised over $4 million in funding. It currently hosts 350 companies across 15 coworking spaces with approximately 5,500 seats, boasting a 95% occupancy rate. Its locations include the National Capital Region (NCR), Mumbai, Bengaluru, and Chandigarh, with clients such as Vice Media, RBL Bank, and Swiggy.
OYO is developing three coworking brands with varying price points: Workflo and PowerStation (mid-to-budget), and Innov8 (premium). The first PowerStation center is planned for Gurugram with over 1,000 seats. This acquisition marks OYO's first entry into the Indian coworking market, placing it in competition with companies like WeWork, 91springboard, and Awfis.
This acquisition comes as OYO expands internationally, having recently raised $1 billion in funding and committed $200 million to its India and South Asia operations. The company reported a 3.5x revenue jump in its India operations and 4.3x year-over-year global sales growth in the year ending March 2018.
A study by JLL and WeWork projected that the Indian coworking industry would attract over $400 million in investments by 2018, with a potential for 12-16 million seats. Inc42 DataLabs estimates over 200 coworking spaces currently operate in India.