Entering in new hospitality spaces--Oyo Townhouse and Oyo Life--the parent company, Oyo Hotels and Homes is speeding its way to conquer the hospitality sector globally. After foraying in Kolkata city to expand its nexus under the Oyo Life brand, the company is now reportedly raising $1.5 billion funding round.
The Gurugram-headquartered hospitality firm is one of the biggest fundraising rounds to date, from its investor, SoftBank and Founder, and CEO of Oyo, Ritesh Agarwal, stated Mint.
According to the cited media report, the amassed funds from investors will be employed to increase Oyos presence in the US, which is one of the fast-paced markets. Further, it will be utilized to strengthen its vacation rentals business in Europe.
According to several media reports, Ritesh Agarwal, Founder of Oyo, will be pumping around $700 million in the hospitality company in the current funding round.
With this transaction, the valuation of Oyo will be incremented to $10 billion. While the existing investment companies like Airbnb and Greenoaks Capital will infuse $800 million in the round, stated Mint citing the companys statement.
By ploughing in money, the Oyo founder plans to increase his stakeholding by three times. He will be procuring stakes from existing investment companies, Lightspeed and Sequoia. The transaction will be carried out through the business entity, RA Hospitality Holdings, stated The Star Online citing the companys statement.
The cited media report stated that Mizuho Financial Group Inc. and Nomura Holdings, the Japanese banks are financial advisers to Oyo.
As Oyo will be valued at $10 billion following the funding round, the company will be surpassing the most valued payment startup, One97 Communications, which runs Paytm. In the previous year, the US-based firm, Walmart had acquired the Indian e-commerce giant, Flipkart for $16 billion.
Further, investments made by Softbank had surged valuations of Paytm, WeWork and Paytm.
The hospitality firm, Oyo encompasses over 35,000 hotels and 125,000 vacation homes as well as over 1.2 million homes.
In September last year, the Indian hospitality company had amassed over $1 billion from SoftBank, including existing investment companies Sequoia, Greenoaks Capital, Lightspeed Venture Partners and new investors like Airbnb. The company has raised more than $3 billion in funds to date.
Oyos founder, Agarwal initiated the company when he dropped the college and was wandering around India in a meager budget. The inconsistent standards to hotels stimulated him to open a hospitality business and provide seamless service to travelers.
To become an Oyo-listed hotel, the hoteliers need to agree to revamp their business altogether. After this, they become listed on Oyo and receive an Oyo sign in the frontal part of their edifice. The company charges nearly 25 per cent for every room booking from listed hoteliers.