India’s Oyo Acquires Motel 6 for $525 Million

One of India’s largest startups, budget hotel company Oyo, has struck a deal to acquire G6 Hospitality, operator of Motel 6.

Oyo says it will pay Blackstone Real Estate $525 million in an all-cash deal. 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 in 35 states. Oyo is dramatically expanding its North American presence with the acquisition of Motel 6 — arguably the most well-known budget motel brand in the country, with a franchise network of about 1,500 locations in the U.S. and Canada.

“This acquisition is a significant milestone for a startup like ours to strengthen our international presence,” Oyo International CEO Gautum Swaroop said in a statement. He added that Motel 6 “will continue to operate as a separate entity.”

Founded in 2012 and backed by SoftBank, Oyo’s was valued at $10 billion in 2019. But it has struggled in recent years due to challenges related to the pandemic, as well as criticism of practices such as offering rooms in unavailable or unlicensed hotels.

Over the summer, TechCrunch reported a new funding round that brought the company’s valuation down to $2.5 billion—less than the total capital raised. (Oyo has denied the valuation reduction.)

Motel 6, in turn, was founded in 1962. It popularized the concept of the budget motel (the original room rate was $6 per night) and was eventually acquired by Blackstone for $1.9 billion in 2012.