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Last Updated : Oct 07, 2019 06:00 PM IST | Source: Moneycontrol.com

OYO to raise $1.5 bn in latest round of funding

A significant part of the funds will be diverted towards continued growth in OYO's fastest-growing market the United States, and in strengthening the company's position in the vacation rentals business in Europe.

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SoftBank-backed OYO on October 7 said it is raising $1.5 billion as part of its Series F round which will see $700 million coming from founder Ritesh Agarwal through RA Hospitality Holdings - a Cayman Islands-based entity.

The rest of the amount will come by some of the existing investors, the company said in a statement.

A significant part of the funds will be diverted towards continued growth in OYO's fastest-growing market the United States, and in strengthening the company's position in the vacation rentals business in Europe.

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Earlier this year, RA Hospitality Holdings’ received CCI approval to invest $2 billion in OYO. In order to facilitate this transaction, Lightspeed Venture Partners and Sequoia are selling part of their shareholding in Oyo to help founder Ritesh Agarwal increase his stake while remaining invested and committed to the company’s long-term mission.

Currently, Agarwal has a 9.43 percent stake in the company. While Lightspeed Ventures and Sequoia Capital have 10.88 percent and 10.24 percent stake, respectively. SoftBank on the other hand has over 45 percent stake in OYO.

Prior to this, OYO had raised over $1 billion in its last financing round, announced on September 2018, led by SoftBank through SoftBank Vision Fund, with participation from existing investors Lightspeed Venture Partners, Sequoia and Greenoaks Capital and supported by new strategic partners like Airbnb.

The company already has a balance sheet of $2 billion across group companies, a significant part of which will be further invested in the business, given the company's focus on maintaining its growth momentum.

"I am happy to share that on a Y-O-Y basis, we have seen that not only are we operating profitably at the building level but at the same time our EBITDA has also improved by 50% (on a Y-o-Y basis). The losses as a percentage of NRV have also been on a steady and significant declining curve. The growth across verticals in India and globally has been phenomenal and we truly believe that we will be able to build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability," said Agarwal.

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First Published on Oct 7, 2019 01:35 pm
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