Indian budget hotel chain startup Oyo has closed about $100 million to $125 million in new funding, reducing its valuation 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 worth $10 billion in 2019. The startup, which has struggled to raise funding from institutional investors, has been aggressively attracting high-net-worth individuals in recent months.
“We truly believe this asset means a lot today. Highly profitable and @70% discount compared to previous valuation. “Listing is expected within 18 to 24 months.” A representative from InCred, a financial company that works with Oyo, has a message for startup founders (as seen by TechCrunch):
TechCrunch reported early last month that Oyo was seeking to raise funding at a valuation of just under $3 billion. At the time, OYO strongly denied “rumors including the valuation.” The new round is likely to be larger, said the aforementioned source, who requested anonymity because the matter was not public.
The new funding follows Oyo shelving its IPO plans last month. The startup, whose backers include SoftBank, Peak
Oyo had initially filed its documents 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 to date, was seeking to raise $1.2 billion in a 2021 IPO at a valuation of $12 billion.
Oyo, once one of India's hottest startups, runs a kind of OS that helps hoteliers accept digital reservations and payments. The startup once operated in dozens of markets, including the U.S. and Europe, but has since curbed its international activities.
It reported net income of $12 million in the fiscal year ending in March, according to founder and CEO Ritesh Agarwal.
In 2019, Agarwal took on $2 billion in debt to increase his stake in Oyo, which was valued at $10 billion at the time. He invested $700 million in primary capital in Oyo and spent $1.3 billion on secondary purchases of Oyo shares. The startup has not commented on the status of that debt since.
Indian newspaper Economic Times also reported on the new financing on Monday, adding that the deal could be finalized as early as Tuesday.
