Introduction

Oyo, the Indian budget hotel chain startup, is currently finalizing a new fundraising round. This round is expected to raise between $100 million to $125 million, which has led to a decrease in the company's valuation to $2.5 billion. This marks a significant decline from its 2019 valuation of $10 billion.

Recent Developments

• Oyo has been facing challenges in raising funds from institutional investors.
• The startup has shifted its focus to pitching to high-net-worth individuals.
• InCred, a financial firm working with Oyo, has expressed confidence in the asset, highlighting its profitability and discounted valuation.

Previous Valuation Rumors

• Earlier reports suggested that Oyo was seeking funds at a $3 billion valuation or lower.
• The company denied these rumors but is now moving forward with the new funding round.
• Sources indicate that the round may exceed the initial target amount.

IPO Plans

• Oyo recently decided to shelve its plans for an IPO.
• Despite having prominent backers like SoftBank and Airbnb, the company has faced challenges in launching its public offering.
• Oyo withdrew its IPO application from the Securities and Exchange Board of India for the second time in four years.

Financial Performance

• Oyo reported a net profit of $12 million in the financial year ending in March.
• The company's founder and CEO, Ritesh Agarwal, heavily invested in Oyo, acquiring a significant stake in the business.
• Agarwal took on significant debt to increase his ownership of Oyo when it was valued at $10 billion.

Future Plans

• Oyo is expected to seek approval from existing shareholders for the new funding round.
• The company has streamlined its international operations, focusing more on its domestic market.

Conclusion

Despite the challenges and fluctuations in valuation, Oyo remains a key player in the budget hotel industry in India. The company's strategic decisions and financial performance will continue to shape its future trajectory.