India’s once-second-most-valuable startup, Oyo, has seen its valuation dip significantly in a new funding round, according to multiple sources who spoke with TechCrunch.
Gurugram-Based Budget Hotel Chain Raises $173.5 Million
Oyo, headquartered in Gurugram, has raised $173.5 million in a Series G funding round, which is significantly lower than its previous valuation of $10 billion. The funding was led by Patient Capital, InCred Wealth, and J&A Partners.
Current Valuation Below Total Capital Raised
According to Tracxn, a data insight platform, Oyo’s total capital raised is approximately $3.3 billion in combined equity and debt financing. This means that the startup’s current valuation of $2.4 billion has fallen below its total capital raised.
Previous Rumors and Controversies
In May, TechCrunch reported that Oyo was seeking to raise a funding round that could lower its valuation to $3 billion or lower. At the time, a spokesperson for the budget hotel chain denied any rumors of a valuation discussion. The startup has been mired in a series of controversies, but it did not respond to a request for comment on this latest development.
Ritesh Agarwal’s Investment
This isn’t the first time Oyo founder and CEO Ritesh Agarwal has invested in the startup. In 2019, he agreed to invest $1.5 billion in Oyo at a valuation of $10 billion. However, the details of this investment, including the terms and its current status, are unclear.
SoftBank’s Internal Valuation Cut
It’s worth noting that SoftBank, which owns more than 40% of Oyo, internally cut the valuation of the Indian startup to $2.7 billion in 2022. At the time, Oyo said there was "no rational basis" for the markdown of its valuation.
New Funding Round Follows IPO Withdrawal
The new funding round follows Oyo’s decision to withdraw its draft red herring prospectus for an initial public offering (IPO) for the second time earlier this year. The Indian startup originally filed the paperwork to go public in 2021, seeking to raise about $1.2 billion at a valuation of $12 billion.
Oyo’s Backers
Oyo counts SoftBank, Airbnb, Peak XV Partners, Microsoft, and Lightspeed Venture Partners among its backers.
Oyo’s IPO Plans
The Indian startup originally filed the paperwork for an IPO in 2021, seeking to raise about $1.2 billion at a valuation of $12 billion. However, India’s market regulator, SEBI, has never approved the startup’s application for an IPO.
Conclusion
Oyo’s latest funding round and its subsequent valuation have raised eyebrows in the Indian startup ecosystem. The startup’s decision to withdraw its IPO plans twice and the uncertainty surrounding its current valuation are just a few of the many challenges it faces.
Related Stories
- India’s market regulator, SEBI, has never approved Oyo’s application for an IPO.
- SoftBank, which owns more than 40% of Oyo, internally cut the valuation of the Indian startup to $2.7 billion in 2022.
- Oyo counts SoftBank, Airbnb, Peak XV Partners, Microsoft, and Lightspeed Venture Partners among its backers.
TechCrunch’s Coverage
TechCrunch has been covering Oyo’s developments closely. In May, we reported that the startup was seeking to raise a funding round that could lower its valuation to $3 billion or lower.
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If you have any questions or would like to share your thoughts on Oyo’s developments, please don’t hesitate to reach out to us at manish@techcrunch.com.
