Indian hotel start-up Oyo raises $ 1.5 billion in latest fundraiser – the New Economy
To increase his stake in the company, Oyo Rooms founder and CEO Ritesh Agarwal will spend $ 700 million to acquire shares in the upcoming $ 1.5 billion funding round.
On October 7, Oyo Rooms, India’s largest budget accommodation startup, confirmed its intention to raise an additional $ 1.5 billion as part of its Series F funding round. Its founder and CEO , Ritesh Agarwal, will spend $ 700 million to buy new shares in the company. Existing investors, including SoftBank, Lightspeed and Sequoia India, will contribute the remainder of the round, bringing the start-up’s valuation to $ 10 billion.
Since its inception in 2013, Oyo has grown to become India’s second-largest start-up and one of the largest hotel chains in the world.
Since its inception in 2013, Oyo has grown to become India’s second-largest start-up and one of the largest hotel chains in the world. It currently manages 1.2 million rooms in more than 80 countries. This latest funding round will help the company strengthen its presence in the United States, Oyo’s fastest growing market, and boost its vacation rental business in Europe.
âThe continued support from our investors like SoftBank Vision Fund, Lightspeed and Sequoia Capital is a testament to the love, trust and unwavering support of our asset owners and clients,â Agarwal said in a statement.
Oyo’s continued growth will bring some solace to SoftBank, after WeWork – of which it was the majority shareholder – requested the withdrawal of its IPO earlier this month.
However, the Indian start-up is in some ways reminiscent of the now disgraced real estate company. Like WeWork, Oyo has yet to make a profit. On top of that, Agarwal’s pressure to increase his stake in the company – almost unprecedented in the Indian start-up industry – reflects the behavior of Adam Neumann, founder and former CEO of WeWork, which shareholders have accused of exercising too much influence within the company. .
Oyo’s success also sparked a backlash among hotel operators in India. The start-up has been criticized for lowering room rates in the country at a time when economic growth is slowing. In addition, Indian hotel partners of the brand accuse it of exorbitant price increases.
In September, two hoteliers in Karnataka state filed complaints against the police that the company was deceptively increasing commissions, accusing Agarwal of fraud. Oyo has denied the allegations, but such damning indictments could continue to haunt the company as it seeks to expand globally.