Hospitality company Oyo’s valuation has decreased to $2.4 billion in its latest funding round. The new valuation represents a roughly 75 per cent drop from $10 billion. This is as per a TechCrunch report.
The parent company of Oyo, Oravel Stays Limited, recently raised Rs 1,457 crore in a Series G funding round. The fundraise was led by InCred Wealth. Other investors who participated in the round include J&A Partners, the family office of Mankind Pharma promoters and ASK Financial Holdings.
In January 2019, the hospitality firm raised $1.5 billion at a valuation of $10 billion. The funding was raised by its founder, Ritesh Agarwal and other investors, including SoftBank.
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The capital will be used to support OYO's growth and its global expansion plans. The investment is being made through compulsory convertible cumulative preference shares, each priced at Rs 29, consistent with the valuation of the recent raise in Series G.
The funding round includes contributions from InCred Wealth, who led the recent fundraise, as well as J&A Partners, the family office of Mankind Pharma promoters and ASK Financial Holdings.
InCred will be issued 2,62,84,483 shares, J&A Partners 4,13,79,310 shares, ASK Financial up to 48,27,586 shares and Patient Capital Investments Pte Ltd 28,62,06,897 shares. The total additional shares that will be issued is 35,86,98,276, priced at Rs 29 per share.
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This would translate to InCred investing around Rs 76 crore, in addition to the Rs 416.85 crore they recently invested. Serial investor Ashish Kacholia is also investing through InCred.
Besides, Patient Capital is investing Rs 830 crore, J&A Partners Rs 120 crore and ASK Rs 14 crore. The Mankind Pharma family is investing through their family office firm J&A Partners, sources said.
The shareholders also approved increasing the company's authorised share capital from Rs 13,41,13,59,300 to Rs 16,31,13,59,300 in the EGM. The appointment of Sumer Juneja, managing partner and head of EMEA & India at SoftBank Investment Advisors, as a non-executive director on Oravel's board was also put up in the EGM and approved with 99.99 per cent votes. Sumer will join Oravel's board as a nominee for the Softbank Vision Fund. Recently, Oyo also postponed its IPO plans.
The company withdrew its draft prospectus from the Securities and Exchange Board of India (SEBI). The papers were reportedly withdrawn due to technical grounds. In 2021 as well, Oyo withdrew its IPO papers. There is no update as to when Oyo will file its IPO paper again.
(With inputs from PTI)
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