India's largest budget, which hosts startups Oyo Hotels and Homes, said it plans to raise about $ 1.5 billion today as part of a new round of funding as the startup seeks to expand its footprints in the US and Europe.
Ritesh Agarwal, Founder and CEO of Oyo said he would invest $ 700 million in a new round of startup financing – Series F – as he wants to acquire more shares in the company, which has already become one of Asia's largest hotel chains. Existing investors SoftBank Group, Lightspeed Venture Partners, Sequoia India will also take part in a round that will evaluate the six-year startup at $ 1
In a statement, the 25-year-old founder stated that "continued support from our investors, such as SoftBank Vision Fund, Lightspeed, Sequoia Capital, is a testament to the love, trust and unwavering support of our asset owners and clients."
He added that a startup that now operates in over 80 markets and manages more than 1.2 million premises, "can truly build a global brand from India, while ensuring that the business is conducted efficiently and with a clear path to profitability."
Oyo, which employs about 20,000 people, said it maintains a strong balance of about $ 2 billion across verticals, and plans to invest a significant portion of it in business. Agarwal said the startup was "profitable in construction, but at the same time our EBIDTA has also improved by 50%" over the last year.
Oyo, which entered China last year, claims that there are 590,000 rooms and presence in 332 cities. In the US, it has established its presence in 21 states and 60 cities. In August, Oyo purchased the Hooters Casino Hotel in Las Vegas for the first time with a $ 135 million real estate purchase in the United States. The same month, the company said it was investing $ 335 million in its rental business in Europe. In May, Oyo acquired Leisure Group for $ 415 million in Greater Europe.
Agarwal's push to attract its stake in the company remains a bold and unheard of story for startups in India. In July this year, it said it plans to spend $ 2 billion through an organization called RA Hospitality Holdings to raise its stake in the company from 10% to 30%. Early investors Lightspeed and Sequoia agreed to sell some of their startup share. Startup founders and investors have endorsed the move.
A $ 10 billion valuation makes Oyo one of India's most valuable startups after Paytm financial services and e-commerce giant Flipkart, which last year sold a $ 16 billion Walmart majority stake. Oyo's growth will also provide some comfort to SoftBank, which has seen some of its recent rates – at WeWork and Uber – deviate from the plan.
To date, Oyo has raised about $ 1.7 billion, of which $ 1 billion. came from last year's funding round. Today, Oyo considers Airbnb one of its investors.