OYO To Raise $50 Mn Funding From InCred

Hospitality unicorn OYO is raising $50 Mn (about INR 415 Cr) from financial services provider InCred. 

According to the startup’s regulatory filing, its shareholders passed a special resolution in May to allot around 14.37 Cr Series G compulsory convertible cumulative preference shares (CCPS) to InCred Wealth and Investment Services Private Limited.

The startup intends to utilise the capital for global expansion, which could also include the acquisition of smaller business in the same sector, as per the filing. 

Post the allotment, InCred will hold around 2.11% stakes in the Ritesh Agarwal-led startup. 

It is pertinent to note that OYO recently withdrew its IPO documents from markets regulator SEBI, and is now looking to raise investment from private investors. Last month, it was reported that the startup was in talks to raise around INR 1,000 Cr from various family offices, including Mankind Pharma promoters Ramesh Juneja and Rajeev Juneja, and stock market expert Anand Jain. 

Prior to that, the startup was said to have roped in InCred to raise $80 Mn to $90 Mn from family offices at a valuation of $2.3 Bn, a sharp 77% decline from $10 Bn valuation at which it last raised funds.

Founded in 2012 by Agarwal, OYO is a hospitality service company that provides  accommodation to customers around the world. The company claims to offer over 40 integrated products and solutions to patrons who operate more than 157K hotels and home storefronts in more than 35 countries, including India, Europe, and Southeast Asia.

OYO reported its first full year of profitability in the financial year 2023-24 (FY24), posting a net profit of about INR 100 Cr, founder and CEO Agarwal claimed.

Taking to social media platform X, Agarwal said OYO logged its eighth straight quarter of positive EBITDA in Q4 FY24. He added that the SoftBank-backed startup’s cash reserves stood at around INR 1,000 Cr at the end of the year.

OYO has raised around $3 Bn in equity and debt till date and counts the likes of SoftBank, Microsoft, and Peak XV Partners among its backers.

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