Oyo Could Enter Food Delivery Business: Reports

New Delhi: Oyo rooms, one of the most successful start-ups in India, could foray into the food delivery business, complimenting its budget hotel business.

According to reports, it is in talks with Online food ordering start-up Foodvista India Pvt. Ltd, which operates FreshMenu to buy a significant stake in it.

Oyo was founded in 2013 by Odisha born Ritesh Agarwal. Today it has grown to over 8500 hotels and 337 cities in India and abroad. On Friday, it announced the commencement of its operations in Japan through a joint venture with Yahoo Japan Corporation to form Oyo Technology and Hospitality Company, Japan.

“Oyo is building a food team, which will help FreshMenu expand to more cities under the brand name of Oyo,” Live Mint said quoting sources on the food venture. “The idea could be more about adding the element of food to further build the hospitality business rather than getting into food delivery entirely.”

Oyo spokesperson told Live Mint: “We do not comment on industry speculation and, therefore, cannot comment on this. As the largest hotel chain in India, operating franchised and lease assets, we do have an active play in the F&B business with over 25% of our revenue coming through the kitchens we operate in our hotels and, hence, culinary design and good food experience are valuable to us.”

The food-tech sector has become hypercompetitive as companies such as Swiggy, Zomato, Uber and Ola battle it out for leadership. This makes it difficult for smaller companies, such as FreshMenu, to compete with deep-pocketed incumbents, which offer deep discounts to win market share.

“Oyo now has immense amount of cash and a strong backing of SoftBank. It will surely try to use this money to enter into multiple verticals,” said an investor in the startup space.