Startup Street: OYO Had No Deal With ZO Rooms After All
Here’s what went on this week on Startup Street.
Rumors of a deal between startups OYO Rooms and ZO Rooms were put to rest after the Ritesh Agarwal-led company clarified that the deal had been called off last year itself. Government-owned oil giants are setting up a Rs 320 crore fund to encourage startups in various verticals of the industry. Binny Bansal, founder of India’s largest e-commerce company Flipkart, has joined the board of a startup the company supports. A lot went on this week on Startup Street.
OYO And ZO Rooms: No Deal
Hotel aggregator startup OYO recently said the potential acquisition of smaller rival ZO Rooms was called off last year. The clarification came after several media reports suggested that the companies are close to a deal.
“In late-2015, OYO explored a potential acquisition of ZO Rooms. The non-binding term sheet for this deal already stands terminated in September 2016,” the company said in an emailed statement to BloombergQuint.
In December 2015, an Economic Times report said that the SoftBank-backed OYO would buy ZO in an all-stock deal. The deal would have given ZO’s seven founders and backer Tiger Global a combined 7 percent stake in OYO. Soon after, SoftBank, in its earnings report, alluded to OYO’s acquisition of ZO Rooms. The speculation gained traction after ZO Room’s website disappeared in February 2016. Its status is still not known. Reports of hurdles to the deal started surfacing by mid-2016.
This is the first time either company has spoken on-record about the talks.
We tried to identify potential value in their business but could not reach an outcome. We can now confirm that OYO has ended all discussions on the matter.OYO Rooms’ Emailed Statement
In September this year, OYO raised another $250 million in a funding round led by SoftBank as the Masayoshi Son-led firm pumped in $100 million through its SoftBank Vision Fund. Till date, OYO has raised about $450 million, according to Crunchbase, which aggregates information on startups.
BloombergQuint could not reach ZO Rooms for a comment. However, in a statement to Inc42, the company said, “OYO is resiling from the contractual terms after acquiring the entire ZO Rooms business by March 2016. This is not an act in good faith and ZO takes a very serious view of the matter and will take all steps to protect its interests and enforce its rights.”
State-Run Oil Firms Have A Rs 320 Crore Fund For Startups
Ten government-owned oil and gas companies have come together to establish a Rs 320-crore fund to support startups in various sectors.
“Startups can be of great asset in areas such as enhancing domestic crude production, affordable renewable energy and energy conservation,” Oil Minister Dharmendra Pradhan said at the Start-Up Sangam in New Delhi where the fund was announced.
Oil PSUs have partnered with 36 startups to spur innovation and new business models in the sector. The companies have created the Rs 320 crore fund for three years, Pradhan added.
This is no charity. This is not CSR. This is business. This is partnership. One of these companies can topple our oil companies.Dharmendra Pradhan, Oil Minister
The 10 state-run firms running the initiative are Indian Oil, Hindustan Petroleum, Bharat Petroleum, Oil India, ONGC, Engineers India, Numaligarh Refinery, Gas Authority of India, Balmer Lawrie and Mangalore Refinery and Petrochemicals.
Flipkart’s Binny Bansal Joins Board Of Freight Startup BlackBuck
Flipkart co-Founder Binny Bansal joined the board of freight and logistics company BlackBuck as a director, according to a filing by its subsidiary Zinca Logistics. Flipkart is already an investor in the startup.
Bansal has replaced Neeraj Agarwal, the former vice president of supply chain operations at Flipkart, who quit from his roles at both Flipkart and BlackBuck earlier this year, according to a filing by the commerce ministry.
Flipkart has invested twice in BlackBuck in 2015. During its second investement, Binny Bansal has said that the startup would help the e-commerce giant’s logistics business and build products that both companies could use, according to a report by VcCircle.
Anand Daniel of Accel India, which has also invested in BlackBuck, joined the company’s board on October 18, according to a separate notification.
Emails to BlackBuck and Binny Bansal remained unanswered.