Oyo, the Indian budget hotel startup, is completing a new fundraising of about $100 million to $125 million, lowering its valuation to $2.5 billion, two people familiar with the matter told JS.
That's a sharp drop in the value of the Gurgaon-headquartered startup, which was worth $10 billion in 2019. The startup, which has struggled to raise money from institutional investors, has been aggressively pitching to high-net-worth individuals in recent months.
“We really feel like this asset makes a lot of sense today. Be profitable and @70% discount on previous valuation. List expected within 18-24 months,” a representative from InCred, a financial firm partnering with Oyo, pitched a message (seen by JS) to a startup founder.
JS reported early last month that Oyo was looking to raise money at a valuation of $3 billion or lower. At the time, Oyo vehemently denied the “rumors, including those regarding the valuation.” The new round is likely to be bigger, said the sources cited above, who requested anonymity because the matter is not public.
The new financing follows Oyo's shelving of its initial public offering plan last month. The startup – which counts SoftBank, Peak
Oyo had initially filed paperwork with SEBI for a public listing in 2021, but withdrew it and filed again in 2023. The company, which has raised more than $3 billion to date, sought to raise $1.2 billion at a $12 billion valuation in its 2021 IPO.
Oyo, once one of the hottest Indian startups, operates an operating system of sorts to help hoteliers accept digital bookings and payments. The startup once operated in dozens of markets, including the US and Europe, but has since curtailed its international operations.
It observed a net profit of $12 million in the fiscal year ending in March, said founder and CEO Ritesh Agarwal.
Agarwal took on $2 billion in debt in 2019 to increase his stake in Oyo, valued at $10 billion at the time. He invested $700 million as primary capital in Oyo and spent $1.3 billion on a secondary purchase 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 a deal could be closed as soon as Tuesday.
