Oyo, an emerging Indian budget hotel chain, is finalizing a new fundraising for between $100 million and $125 million, bringing its valuation down to $2.5 billion, two people familiar with the matter told TechCrunch.
This is a sharp decline in the value of the Gurgaon-headquartered startup, which was valued at $10 billion in 2019. The startup, which has been struggling to raise money from institutional investors, has been aggressively pitching to high-net-worth individuals in recent months .
“We really feel that this asset makes a lot of sense today. Being profitable and at a 70% discount on the previous valuation. The listing is expected to happen within 18 to 24 months,” said a representative of InCred, a financial firm working with Oyo. In a letter (seen by TechCrunch) to a startup founder.
TechCrunch reported early last month that Oyo was seeking to raise money at a valuation of $3 billion or less. At the time, Oyo strongly denied “the rumours, including those related to the valuation.” The aforementioned sources, who requested anonymity because the matter is not announced, said that the size of the new round is likely to increase.
The new funding comes after Oyo suspended its plan to go public last month. The startup — which counts SoftBank, Peak
Oyo had initially filed papers with SEBI in 2021 for a public listing but withdrew them and refiled them in 2023. The company, which has raised more than $3 billion so far, has sought to raise $1.2 billion at a valuation of $12 billion in an IPO in 2021.
Oyo, once one of the hottest Indian startups, has been running an operating system of sorts to help hoteliers accept digital bookings and payments. The startup previously operated in dozens of markets, including the US and Europe, but has since restricted its international activity.
I noticed Net profit: $12 million In the fiscal year ending March, according to founder and CEO Ritesh Agarwal.
Agarwal in 2019 took out $2 billion in debt to increase his stake in Oyo, which was worth $10 billion at the time. He invested $700 million as seed capital in Oyo and spent $1.3 billion on secondary purchase of Oyo shares. The startup has not commented on the status of this debt since then.
Economic Times of India newspaper Also mentioned announced the new financing on Monday, adding that the deal could close as early as Tuesday.