📷 Image Credits: TechCrunch
Oyo, the Indian budget-hotel chain startup, is in talks with investors to raise a new round of funding at a reduced valuation of around $2.5 billion, as reported by TechCrunch. This marks a significant decline from its peak valuation of $10 billion in 2019. The startup, which has been struggling to secure funds from institutional investors, is now exploring funding opportunities with investors like Khazanah, Malaysia’s sovereign wealth fund.
The proposed funding round may also involve secondary transactions that could further lower Oyo’s valuation. The company’s founder, Ritesh Agarwal, had purchased $2 billion in shares from Sequoia Capital and Lightspeed Venture Partners previously. A valuation of $3 billion or less would be below the total capital Oyo has raised through equity and debt financing over the years.
SoftBank, Oyo’s largest shareholder with over 40% ownership, had previously marked down the value of the startup to $2.7 billion in 2022. Oyo had refuted the markdown, citing its business performance and profitability. However, ongoing discussions indicate a potential valuation adjustment.
While Oyo has denied talks of a reduced valuation, it is reportedly preparing to withdraw its IPO application from the Securities and Exchange Board of India (SEBI) for the second time. The company had initially filed for an IPO in 2021, seeking to raise over $1 billion. Oyo is refocusing on performance and profitability amidst these developments.
Overall, Oyo’s funding and valuation situation remains fluid, with discussions ongoing and terms subject to change. Stay tuned for further updates on Oyo’s financial trajectory.
