Hospitality start-up Oyo has raised around $50 million from financial services group InCred Wealth and Investment at a valuation of around $2.38 billion, as reported by Entrackr.
The valuation is around 76 per cent lower than the company’s peak valuation of $10 billion. In May of this year, there were reports that the hospitality start-up was looking for funding at a 70 per cent valuation cut.
The start-up is gathering $100 million from family offices and wealthy individuals as part of a larger investment round before refiling its draft prospectus for an IPO, according to the report.
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The company will reportedly use the funding for global investment, enhancing the business plan and acquisitions. Oyo is receiving this funding after a gap of almost three years.
In August 2021, Microsoft invested $5 million in the SoftBank-backed start-up. As per Tech Crunch, at the time of the investment, Oyo’s valuation was $9.6 billion, slightly below its peak valuation of $10 billion. The investment came just as the start-up was recovering from the Covid-19 pandemic.
Speaking to Bloomberg TV, Ritesh Agarwal, the company CEO, said that the pandemic hit the company like a cyclone. He added, “We built something for so many years, and it took just 30 days for it to drop by over 60 per cent.”
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Recently, Agarwal reportedly announced that the company made its first-ever annual net profit of Rs 100 crore in FY24. Meanwhile, the company also withdrew its draft IPO application for the second time in a row. Oyo might refile its IPO papers after it raises more capital.
While mentioning that the firm was looking for a fundraise, the Economic Times reported that Agarwal was in talks with high-net-worth investors. The company had between $200 and $250 million in bank cash in February after drastically lowering its operating costs, according to the report.
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