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Oyo Rooms looks to buy rival Zo

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, three people familiar with the matter said.

The overture from Oyo Rooms comes 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, the three people cited above said on condition of anonymity.

 “Zo has held talks with several new investors though a deal is not near any closure,” one of the people cited above said.