Airbnb to buy Trooly

Airbnb Inc. is purchasing background check startup Trooly Inc. in an effort to protect its guests and hosts from bad actors. Los Altos, California based Trooly has been helping Airbnb authenticate user identities since 2015. By analyzing data from public records, social media and other sources, Trooly technology could help Airbnb track various customer violations, such as side deals between guests and hosts.

Since starting in 2008, Airbnb has struggled to control fraudulent listings from people posing as property owners. Some Airbnb guests have also been found to sidestep the company by finding an attractive listing on Airbnb website, then contacting the hosts—usually via social media—and offering to pay them directly. Airbnb takes as much as a 12% fee from its guests. Hosts are charged a 3% fee on listings that are booked. In most cases, the company is also required to charge guests a local tax, usually 3 percent, though the tax rates vary by city, state and country.

Trooly was started in 2014, but waited until last year to raise $10 million in its first round of financing, led by Bain Capital Ventures and Milliways Ventures. Airbnb is purchasing Trooly intellectual property and engineering team, according to people familiar with the situation. The home-rental site is expected to close the deal on Monday when Trooly will shut down operations as an independent company, said the people, who asked not to be identified because the information is private.

The acquisition comes at a time of expansion for Airbnb. The privately held company, valued at about $31 billion, has more than 3 million home and apartment-rental listings and is expanding into new product categories including travel “experiences.” In February, Airbnb purchased Canadian property management company Luxury Retreats. San Francisco-based Airbnb turned a profit for the first time in the second half of 2016.

Oyo Rooms may buy Zo Rooms

Budget Hotel site Oyo Rooms (Oravel Stays Pvt. Ltd) has expressed interest in buying smaller rival Zo Rooms, which is scrambling to raise a fresh round of funds in order to avoid being sold. The overture from Oyo Rooms follows the entry of large online travel firms MakeMyTrip, Yatra Online Pvt. Ltd and Goibibo into the budget hotel segment.

Though Zo Rooms, run by Zostel Hospitality Pvt. Ltd is currently in conversations with at least two investors for a fresh funding round, it faces an uphill task as its biggest investor; Tiger Global Management has decided to go slow on writing large cheques for the smaller companies in its portfolio. Zo raised roughly $35 Million from Tiger and Orios Management this year.

Oyo Rooms is the early market leader among budget hotels, having raised $100 Million from Japan Softbank Group and others in August. Budget hotel aggregators were supposed to be the next big thing for investors and entrepreneurs, but as with most other new, unproven business such as food tech, investors and entrepreneurs seem to have overestimated the potential of the business.

Budget hotel launches by online travel agencies has only made investors in hotel startups more cautious. MakeMyTrip, Yatra and Goibibo launched their budget hotel businesses, putting them in direct competition with Oyo and Zo and potentially triggering consolidation among startups. The online travel firms have already delisted Oyo and Zo from their platforms, indicating their ambition to build a budget hotels business independently. 

Marriott to buy Starwood

Marriott International Inc. will buy Starwood Hotels and Resorts Worldwide Inc. for $12.2 Billion to create the world’s largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.

The combined company will own or franchise more than 5,500 hotels with 11 Million rooms worldwide and give Marriott greater presence in markets such as Europe, Latin America, & Asia including India and China. Marriott currently has three-quarters of its rooms in the United States. Starwood, which also owns St. Regis and Aloft Hotel brands, gets nearly two thirds of its revenue from outside the country.

Starwood had essentially put itself up for sale in April, when it said it was considering strategic alternatives, taking about 14% off its stock up to Friday’s close. The company which had a market value of $12.67 Billion had reached out of InterContinental Hotels Group Plc. Wyndham Worldwide Corp and sovereign wealth funds for a possible deal.

Starwood shareholders will get 0.92 Marriott Class A share and $2 in cash for each share held. They will also get about $7.80 per share from the spinoff of Starwood timeshare business and subsequent merger with Interval Leisure Group Inc.