Oyo in talks to acquire FreshMenu

Gurugram based hospitality chain OYO Hotels and Homes is in talks to acquire Bengaluru based cloud Kitchen startup FreshMenu in a deal worth $50 Mn - $60 Mn. FreshMenu shareholder Zodius Capital may be paid in cash while, the founders and investors Lightspeed Venture Partners and GrowthStory will be allocated Oyo shares, if the deal is finalized.

If the deal goes through successfully, Oyo will make its foray into online food delivery business. The move is said to enhance its hospitality business portfolio and food is an essential element to its operations. Bengaluru-based FreshMenu had been looking to raise capital for the last few months. The deal is being considered as a win-win proposition for both the companies.

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

FreshMenu clocks about 15,000-20,000 orders daily and if Oyo acquires the startup kitchen, it will leverage highly on the company's infrastructure of 170,000 rooms across India. Oyo's advanced rounds of these discussions with FreshMenu follow after it recently rose close to $1 billion from Japan's SoftBank with participation from ride-hailing companies Grab and Didi Chuxing taking up its valuation to $5 billion.