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Oyo Rooms Files for $1.16B IPO Raising Its Valuation to $12B

UTC by Steve Muchoki · 3 min read
Oyo Rooms Files for $1.16B IPO Raising Its Valuation to $12B
Photo: Depositphotos

In the financial year that ended in March 2021, the company reported a loss of $528 million on a total income of $600 million.

Oyo Rooms, a multinational privately held company, has filed for an initial public offering with the local market regulator. According to news outlet TechCrunch, Oyo seeks to raise about $1.16 billion from the public via its IPO. Notably, Oyo has announced plans to raise approximately $942 million through the sale of new shares, while the rest will come from the sale of existing shares.

According to the IPO filings, SoftBank, which is a major investor in the company, seeks to sell its stake worth approximately $175 million. The firm intends to use over $330 million to repay its debt, following a recent $660 million raised in debt.

Founded in 2013 by the 27-year-old billionaire Ritesh Agarwal, Oyo Rooms enjoys notable investment from global investors including Didi Chuxing, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb, and China Lodging Group.

The firm has undertaken several private fundings in the past with its recent funding raising its valuation to $9 billion. Back in 2019, Agarwal signed a $2 billion deal with the company to repurchase shares from existing investors Lightspeed Venture Partners and Sequoia India. Consequently, the young billionaire increased his stake in the company to 30%.

At the beginning of the fourth quarter of 2019, OYO raised $1.5 billion in Series F funding led by SoftBank Group, Lightspeed Venture Partners, and Sequoia India. In July of this year, American tech giant Microsoft began talks with the company to invest in it before a possible initial public offering.

Oyo Rooms Ahead of IPO

Having gone through the coronavirus crisis, the company was one of the hard-hit industries. According to the company, it experienced a decline of over 60% during the height of the pandemic. However, as more countries roll out the coronavirus vaccines, its market has risen to almost pre-Covid times.

In the financial year that ended in March 2021, the company reported a loss of $528 million on a total income of $600 million. Oyo does not own any hotel but instead has cooperation with over 157,000 partners.

Over the years, the company has made strategic acquisitions to help it penetrate global markets. In March 2018, the firm announced the acquisition of Chennai-based service apartment operator Novascotia Boutique Homes. In May 2019, Oyo announced the acquisition of Amsterdam-based Leisure Group, Europe’s largest vacation rental company.

The company has also made notable partnerships with other leading companies in the hotel business. In 2019, Oyo and Airbnb announced a strategic partnership with Airbnb investing in OYO and the company will list their properties on the Airbnb platform.

Business News, IPO News, Market News, News
Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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