One of India’s largest startups, budget hotel company Oyo, has reached a deal to acquire G6 Hospitality, which operates Motel 6.
Oyo says it will pay Blackstone Real Estate $525 million in an all-cash transaction. The acquisition also includes the Studio 6 extended stay brand and is expected to close in the fourth quarter of this year.
The Indian startup opened its first U.S. location in 2019 and now operates more than 320 hotels across 35 states. Oyo is dramatically expanding its North American footprint by acquiring Motel 6 — arguably the best-known budget hotel brand in the country, with a franchise network of around 1,500 locations in the United States and Canada.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Oyo International CEO Gautum Swaroop in a statement. He added that Motel 6 will “continue to operate as a separate entity.”
Founded in 2012, SoftBank-backed Oyo’s was valued at $10 billion in 2019, but has struggled in recent years due to pandemic-related challenges, as well as criticism over practices such as offering rooms from unavailable or unlicensed hotels.
Over the summer, TechCrunch reported on a new funding round that saw the company’s valuation fall to $2.5 billion — less than its total capital raised. (Oyo has denied reporting about its lowered valuation.)
Motel 6, meanwhile, was founded in 1962. It popularized the budget hotel concept (rooms originally cost $6 a night) and was eventually acquired by Blackstone for $1.9 billion in 2012.