India’s Oyo closes Series F round at $1.5b

Previously, the firm received a first tranche of $700 million from the two investors. Agarwal announced the full target at the same time. According to documents filed with the Registrar of Companies, SoftBank has committed $806.7 million, or slightly more than half of the entire round.

“This is a key development for Oyo Hotels & Homes, and additional funds will help the business achieve its strategic objectives for 2020, which include accretive and sustainable growth, operational excellence and investment in corporate governance and training,” the company said in an e-mailed response, attributing the statement to an official spokesperson.

Founded in 2013, Oyo provides budget hotel and vacation homeowners with a platform to market their rooms to individual and corporate travelers. The company’s portfolio includes more than 43,000 hotels and 50,000 vacation homes, and over one million rooms globally. It also operates its own line of accommodations under the Townhouse brand, offering a premium experience at properties leased and managed by Oyo.

According to Oyo CFO Abhishek Gupta, the company earned $951 million in revenue from its global operations in the 12 months ended March 2019. India contributed more than three-fifths of the total. Net loss figures are said to be lower in the country.

Earlier in the year, Oyo went on an extensive retrenchment drive, terminating contracts for more than 7,000 employees across different markets following a year of rapid expansion. Before 2019, Oyo marketed rooms in eight countries but has since expanded its presence in more than 60. Agarwal has said the company plans to maintain a 25,000-strong workforce.

In the past 12 months, Oyo appointed new leaders for operations in China, Malaysia, Southeast Asia and the Middle East, India and South Asia, and the UK. It also added two independent directors to its board. Following widespread media reports of fracturing relationships with certain hotel partners, the company also launched a feedback mechanism in India to address their concerns. 

Oyo expects to continue to make investments outside India. Last month, its vacation home unit acquired a Germany-based holiday-home operator, adding 17,000 properties in Europe to the company’s portfolio.

“Since China and other international markets were in development and investment mode, they contributed to $252 million (75%) of the $335 million losses for FY2019, while these markets constituted only 36.5% of the global revenues. We will continue to make growth investments in multiple new markets in the next fiscal year as well,” Gupta wrote in a blog post last month.

However, business is expected to suffer due to the ongoing coronavirus pandemic, which has severely curbed travel and room bookings.

Existing investors in the company include Singapore’s DSG Consumer Partners, ride-hailing players Grab and Didi Chuxing, US-based Greenoaks Capital, India’s VentureNursery and Hero Cycles, and US hospitality giant Airbnb. Early backers Sequoia Capital India and Lightspeed Venture Partners have realized partial exits by selling an undisclosed number of shares to Agarwal but remain invested in the company.

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• Topics
• South Asia
• Expansion
• Technology
• India
• Softbank
• TMT