Indian budget hotel chain startup Oyo has closed a new round of funding of about $100 million to $125 million that would bring the company’s valuation to $2.5 billion, two people familiar with the matter told TechCrunch.
That’s a steep drop considering the Gurgaon-based startup was valued at $10 billion in 2019. The startup, which has struggled to raise capital from institutional investors, has been aggressively pitching to high-net-worth individuals in recent months.
“We truly feel the asset is extremely valuable now; it is profitable and at a 70% discount to previous valuation. We expect to list within the next 18-24 months,” a representative from InCred, a finance firm that has partnered with Oyo, said in a message to the startup’s founders and seen by TechCrunch.
TechCrunch reported early last month that Oyo was seeking funding at a valuation of less than $3 billion. At the time, Oyo strongly denied the rumor, “including any rumors about the valuation.” The new funding round is likely to be larger, according to the sources, who asked not to be identified as the matter is private.
The new funding comes after Oyo shelved its IPO plans last month. The startup backed by SoftBank, Peak XV Ventures, Lightspeed, Airbnb and Microsoft has withdrawn its IPO applications from India’s markets regulator, the Securities and Exchange Board of India, twice in the past four years.
Oyo initially filed an IPO application with the Securities and Exchange Commission in 2021, then withdrew it and refiled it in 2023. The company, which has raised more than $3 billion to date, had been seeking to raise $1.2 billion in its 2021 IPO at a valuation of $12 billion.
Once one of India’s hottest startups, Oyo runs a kind of operating system that helps hoteliers accept digital bookings and payments. The startup once operated in dozens of markets, including the U.S. and Europe, but has since backed off expanding internationally.
The company made a net profit of $12 million for the fiscal year that ended in March, according to founder and CEO Ritesh Agarwal.
Agarwal took on $2 billion in debt in 2019 to boost his stake in Oyo, which was then valued at $10 billion. He invested $700 million in initial capital in Oyo and spent $1.3 billion on secondary purchases of Oyo shares. The company has not commented on its debt situation since then.
Indian newspaper The Economic Times also reported on the new funding on Monday.
