Oyo Hotels & Homes raises $1.5bn in new funding

Amidst Oyo Boom Hotels Pull Out Citing High Commissions Undisclosed Fees

Amidst Oyo Boom Hotels Pull Out Citing High Commissions Undisclosed Fees

India's largest funds lodging startup Oyo Lodges and Houses stated immediately it plans to lift about $1.5 billion as a part of a brand new financing spherical because the startup seems to broaden its footprints within the USA and Europe.

Of the $1.5 billion, Agarwal's RA Hospitality Holdings will spend approximately $700 million and the rest will be supplemented by existing investors.

Existing investors SoftBank Group, Lightspeed Venture Partners and Sequoia India will also participate in the round, which value the six-year-old startup at 10 billion dollars (about Rs 77,780 crore).

"The startup, which today operates in over 80 markets and manages over 1.2 million rooms, can build a truly global brand out of India while ensuring that the business is run efficiently and with a clear path to profitability", he said in a statement.

"I am also happy to share that on a Year-on-year basis, we have seen that not only are we operating profitably at the building level but at the same time our EBITDA has also improved by 50 per cent (on a year-on-year basis)".

He added that the startup, which immediately operates in over 80 markets and manages over 1.2 million rooms, "can construct a very global model out of India, whereas guaranteeing that the enterprise is run effectively and with a transparent path to profitability". Within the USA, it has established presence in 21 states and 60 cities. In the United States, Oyo is rebranding the Hooters Casino Hotel in Las Vegas as its own. The company already has a strong balance sheet of $2 billion across group companies, a significant part of which will be further invested in the business, given the company's focus on maintaining its growth momentum.

Agarwal's push to raise his stake in the company remains a bold and unprecedented move for startups in India.

Ritesh Agarwal, The young founder made headlines in July when he shared his plans to spend $2 billion to raise his stake in the company from about 10% to 30%. Lightspeed Venture Partners and Sequoia are selling part of their shareholding in Oyo to help Agarwal increase his stake.

While startup founders and investors have cheered the move, it has also raised some questions. If you want to get listed, together with a bright red Oyo sign to hang street-side as a seal of housekeeping approval, you have to agree to a makeover that typically takes about a month. "We now personal continuously disclosed any adjustments relevant to contracts with asset owners", Oyo acknowledged in a press initiate.

RA Hospitality Holdings has received CCI approval to invest almost $2 billion primary and secondary management investments in OYO.

On October 7, Oyo Rooms, India's largest budget lodging start-up, confirmed plans to raise an additional $1.5bn as part of its Series F funding round. Other investors in Oyo include ride-hailing majors China's Didi Chuxing and Southeast Asia's Grab, besides home-sharing major Airbnb.

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