OYO raises $800 mn from SoftBank, others at valuation of $4 bn

OYO Rooms (Representative Image)

In what appears to be an internal round hospitality firm Oyo has raised $800 million in its latest financing round led by SoftBank Investment Advisers (SBIA) with participation from Lightspeed Venture Partners, Sequoia and Greenoaks Capital.

The company has also received a commitment of an additional $200 million, bringing the total amount to $1 billion in this round. This money is also expected to be coming from the same set of investors.

According to sources privy to the development, the valuation of Oyo reaches $3-4 billion post the round bringing it in the league of other Softbank-backed unicorns such as Ola.

Ola currently is estimated to be valued at $4.3 billion and is in talks to raise a fresh round of funding.

$3-4 billion is a sharp rise from Oyo’s previous valuation of $800 million during its last round of funding.

Oyo last raised around $250 million in a round led by SoftBank Vision Fund, and another $10 million from Nasdaq-listed Chinese hotel operator China Lodging Group, in September last year.

About $600 million of the fund raised will be spent in strengthening the company’s position in China, while the rest will go into maintaining its leadership position in India and expansion into new markets.

“We have already started expanding our presence to newer segments, with Oyo Home, Oyo Townhouse and more recently Palette Resorts by Oyo. We will continue to explore newer businesses while remaining focused on both organic and inorganic growth. In the last 12 months, we have increased our international footprint to five countries – India, China, Malaysia, and Nepal, and more recently in the UK. With this additional funding, we plan to rapidly scale our business in these countries, while continuing to invest further in technology and talent. We will also deploy fresh capital to take our unique model that enables small hotel owners to create quality living spaces, global,” said Ritesh Agarwal, founder and chief executive officer of, Oyo.

Moneycontrol reported in May that Softbank had asked Oyo to fetch new investors for this round.

According to media reports, the company was in talks with US-based WeWork, China’s Tencent among other investors for this round.

However, it appears that Softbank decided to lead the round.

The company claims that it has 125,000 rooms in India and is witnessing three-fold growth in transactions year-on-year with net take rates over 20%.

Oyo China, on the other hand, has a presence in 171 cities with over 87,000 rooms.

“Oyo’s unique value proposition and outstanding growth over the last few years gives us the confidence that Oyo can scale, innovate and continue to offer an intuitive customer experience, curated for different markets,” said Justin Wilson, director, SBIA.

Launched in May 2013, by 23-year old Ritesh Agarwal, Oyo used to aggregate select rooms across hotels and offer them on its website.

However, the company received a lot of flak on social media for poor customer service and poor quality of inventory in some parts of India.

The Gurugram-based company now has a franchisee model, under which it offers customers rooms from exclusive properties that have either been leased by Oyo or are run on a revenue-share basis.

Oyo is present in over 350 cities with over 10,000 asset partners spread across five countries including India, China, Malaysia, Nepal, and the UK.

The company claims to host over 125,000 room nights every single day.

J.P. Morgan is acting as the exclusive financial advisor to Oyo on this fundraising.