SoftBank group-backed Oyo is reportedly in talks to raise Rs 1,000 crore ($120 million), primarily from family offices of stock market experts and Indian corporate executives, as per a report by the Economic Times.
This fundraise will reduce the company’s valuation to $2.5 billion. In 2019, the company was valued at $10 billion. Those who will participate in the fund raise reportedly include Anand Jain, corporate strategy advisor and former Reliance Industries senior executive; Ramesh and Rajeev Juneja, the founders of Mankind Pharma; and Utpal Sheth, often called the right hand of Indian investor Rakesh Jhunjhunwala.
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Interestingly, for new-age companies, family offices have emerged as a key source of capital. As per Investopedia, “A family office is a private wealth management advisory firm that serves ultra-high-net-worth individuals (HNWI). Family offices are different from traditional wealth management shops in that they offer a total solution to managing the financial and investment needs of an affluent individual or family.”
In order to seek approval for the funding, an extraordinary general meeting will be held by the hotel chain start-up on Tuesday. Recently, its application for an initial public offering was withdrawn by Oyo. Following this, the company was in talks with investors for a new round of funding.
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After completing the refinancing of a $450 million loan, the company plans to file for an IPO again. Speaking to the Economic Times, a source said, “Oyo also wants to allocate a piece to Khazanah Nasional, as it’s a sovereign wealth fund and adds more credibility to the cap table.”
Oyo is reportedly in the final stage of negotiations with Khazanah Nasional, the sovereign wealth fund of Malaysia. It is reportedly said that Oyo’s Ritesh Agarwal might raise Rs 250–300 crore from the rest of the domestic investors and Khazanah Nasional.
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