Accor has been fairly quiet over the last couple of months on the acquisition front but it looks like another deal is in the offing with reports in India suggesting the French company is keen on investing in Indian budget hotel brand Treebo.

While it might not be a household name in Europe and North America, Treebo is a rival of Oyo, which has generated plenty of headlines recently thanks to its aggressive fundraising and expansion.

Oyo’s rapid rise has helped elevate it above the competition. It has raised $1.7 billion in funding whereas competitors like Treebo and FabHotels have only managed $57 million and $35.3 million respectively. Accor’s potential investment might help redress the balance.

Oyo itself was supposedly interested in buying Treebo and there were also suggestions of a merger between Treebo and FabHotels.

See Oyo founder and CEO Ritesh Agarwal at Skift Forum Asia

Accor’s investment is reportedly around the $40 million range, according to the Economic Times of India — a relatively small outlay that could turn out to be pretty useful if Treebo can grow outside of the Indian subcontinent.

Analysts at Bernstein suggest that Accor could use Treebo to increase its branding across Europe, where there are a larger proportion of unbranded properties, compared with the United States. Oyo itself has begun to creep into the European market. 

“Terms of the deal are not disclosed, but Accor’s minority stakes often mean licenses to develop brands outside the home market… If that is the case, Accor could roll Treebo out in Europe and offer a branded solution to the myriad of small/budget hotels,” analysts said of an Accor-Treebo deal.

Accor and Treebo have yet to respond to Skift’s request for comment.

Photo Credit: A Treebo hotel room. The company is a rival to Oyo. Treebo