Leading budget-hotels aggregator OYO has acquired Chennai-based service apartment company Novascotia Boutique Homes.

This is OYO’s first business acquisition since its launch in 2013.

With this acquisition, OYO will bring its distribution, operational, transformational and technological capabilities on board.

The acquisition will boost OYO’s portfolio by 350 rooms across locations where Novascotia has its footprints.

Commenting on the development, Ritesh Agarwal, Founder & CEO of OYO, said: “Though in the niche segment of boutique homes, Novascotia brings with it the expertise in catering to the corporate travel segment, an area we have seen great potential and established ourselves as the market leader with varied offerings across 230-plus cities including all major corporate hubs.”

“The acquisition forms an integral part of our inorganic growth plan, in line with our ambition to create beautiful and quality living spaces and adding value to every form of real estate. OYO is poised to deliver 180,000 keys by the end of 2018 and with Novascotia’s Strength, we will be adding service apartments to our existing portfolio – which includes budget rooms, OYO Townhouse, OYO Home, enabling us to offer a wide range of choices to our customers,” he added.

With 100% of its demand coming from corporates and a healthy EBITDA of 14%, Novascotia has built a strong portfolio for itself while providing executive furnished accommodation to corporates for their personnel stay in locations, including Chennai, Coimbatore, Hyderabad, Kochi and Trivandrum and OYO plans to expand these offerings to 12 cities by the end of 2018. These serviced apartments are located in the heart of business hubs equipped with spacious rooms, upscale interiors, meals, gym and dining area to cater all the requirements of business travellers.

G. Madhu Manohar and Girja Madhu, Co-founders, Novascotia, said, “Novascotia is a brand built over years with a lot of commitment and hard work. With OYO, we saw similar passion towards solving a problem and we are thrilled to become a part of the entity which is driven by perseverance and innovation. We are convinced that OYO with its wide experience in the hospitality business and hunger for delivering quality customer experience has every potential to take the Novascotia brand promise of ‘home away from home; forward. We are delighted with the support and professionalism received from OYO, its teams and our advisers at ANOVA Corporate Services for taking this to closure. We are excited to be onboard.”

OYO has operations in more than 230 cities across India, Malaysia and Nepal. With over 70,000 rooms in its network, OYO works in close proximity with its hotel partners while exercising full control over the hotels for ensuring a quality experience for travellers. Its network includes major metros, regional business hubs, top leisure destinations as well as pilgrimage towns.

OYO is backed by leading investors, including the SoftBank Group, Greenoak Capital, Sequoia India, Lightspeed India, Hero Enterprise and China Lodging Group.

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Bangalore-based fashion e-commerce company Myntra today announced that it has acqui-hired InLogg, a technology platform that provides logistics solutions for the ecommerce sector. As part of the acquisition, the team at InLogg has been inducted into Myntra, making it an acqui-hire that will further strengthen and expand Myntra’s supply chain capabilities.

InLogg was founded in 2015 by a team with first hand expertise in fulfillment, technology and business, with an aim to standardize the process of logistics in remote areas and bring in efficiency. To enable reach, the InLogg platform has onboarded local and regional courier players in multiple states across the country. The company stitches composite supply chain using multiple regional logistics players to provide a pan India delivery network.

Over 50% of the e-commerce and retail business in India is contributed by tier 2, 3 and 4 cities and towns. With limited logistical capability and reliability in these areas, InLogg devised a solution to bridge the gap with technology. InLogg is uplifting technology sophistication of regional courier companies by providing SaaS for shipment lifecycle management, mobile apps for pickup, delivery, returns, Cash on Delivery reconciliation, reporting and analytics. This helps in standardizing the logistics fulfillment process and providing needed visibility. With this acquisition, Myntra will be able to strengthen its logistics capability with an expanded reach and improved customer experience.

Ananya Tripathi, Chief Strategy and Planning Officer, Myntra, said “The Inlogg acqui-hire with the platform and capabilities will help us scale while delivering great customer experience in Tier 2, 3 and 4 cities. It will allow us to leverage local and regional players to enhance our reach, reduce delivery time and develop a plug and play model which can be scaled in the future.”

Ambarish Kenghe, Chief Product Officer, Myntra, said “With the implementation of GST, launch of Value added services and continued focus on efficiency in FY18, has led to SCM becoming one of the most exciting areas where we will continue to invest for the future”

InLogg is Myntra’s fourth technology led acquisition. Myntra has previously acqui-hired Cubeit, Native5, and Fitiquette.

Picture credit: Pixabay

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News Corp VCCEdge, the financial research platform of News Corp VCCircle has released its annual deals report for CY2016.

Capturing funding deal activities encompassing private equity, venture capital, angel/seed investment transactions for the year ending December 2016, the report also offers information on mergers and acquisitions, exits and the funds raised during the year.

Key highlights:

Domestic M&A going strong

• The number of M&A deals remained robust this year with 1,002 deals recorded, with the value of deals hitting a five-year high of $61.44 billion -– a jump of 159% in value terms from 2015 which saw 995 deals amounting to $23.71 billion.
• There were 633 domestic M&A deals amounting to $32.77 billion -– a jump of over 278% in value terms and 143 Inbound deals amounting to $18.78 billion -– a jump of over 133% in value terms.
• Outbound deals recorded this year saw a 16% dip in number at 115 while the deal value declined 8% to $4.9 billion when compared to CY2015.
• The hike in the M&A deal value can be attributed to the three deals worth $27.7 billion which includes, Essar Oil Ltd, Max Life Insurance Co. Ltd and Reliance Communications Ltd., Wireless Telecom Business acquisitions contributing 45% of the overall deal value.

Exits instill confidence

• Private equity investors unlocked $6.79 billion worth of investments across 239 exits in 2016 – nearly 17% more in value terms when compared to 2015 and the highest in the past five years.
• M&A exits were the flavor of the year contributing 43% of the total exit activity closely followed by open market exits at 32%.

Return of the IPO

• 2016 has been a record year for IPOs, wherein fundraising via IPOs surged to a five-year high with $4.12 billion raised across 93 IPOs when compared to $2.19 billion from 62 IPOs in 2015.
• Overall Equity Capital Market (ECM) deals constituting IPOs, Follow on Offerings, Rights issue, QIP and Private Placements increased by 18% in 2016 with 116 deals as compared to 98 in 2015, however, capital raised dipped by ~20% from $6.17 billion to $4.99 billion

Angels hold transaction volumes in a tepid year of funding

• Angel and Seed investors drove the deal activity during the year, contributing 57% of the total private equity investments in 2016. This figure stood at 32% in 2012 and has been rising every year. They accounted for 748 deals amounting to $324 million.
• The number of PE deals slumped almost 25% to 1309 deals. The value of PE transactions, slumped by 44% to around $12.38 billion from $22.01 billion in 2015.
• Early-stage investments in start-ups (including angel/seed and VC Series A and Series B rounds) has shown a significant decline of 39% to $1.59 billion in CY2016, as compared to $2.62 billion last year, while deal volume declined by 24% from 1,286 to 984 deals
• Bridge round accounted for 50 deals worth $40.1 million accounting for 14% of the total venture capital deals proving the challenges in raising fresh round of funding
• Average deal value slipped to $13.09 million in 2016, as compared to $14.48 million a year ago. Though median deal value saw a slight increase from $0.91 million last year to $1 million this year

Guided by Circumspection: PE Funds Launched

• There were 50 new PE funds launched during the year with a targeted capital of $5.3 billion – a fall of 11% in number and over 68% in value terms. In 2015 there were 56 new funds launched with a targeted capital of $ 16.9 billion.
• Of these 50, 34 had a fund size of under $100 million while there were only three in the above $500 million category.

Nita Kapoor, Head – India New Ventures, News Corp, and CEO, News Corp VCCircle, said: “While M&A activity in India perked up in 2016 thanks to a few multi-billion-dollar deals that companies struck either to slash debt or consolidate their market share, what we are seeing is the flow of angel/seed money into enterprises in sectors like fintech, healthcare, education and travel which will continue into 2017. There is a huge funding opportunity for start-ups operating in these sectors that succeed in delivering a good consumer experience.”

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