Ritish Agravar’s Oyo, which has been battling last year’s pandemic, is finally back on its feet. The startups are now applying for an IPO and seeking to raise $1.16 billion, having secured a valuation of $9.6 billion in a funding round soon after the worst year in history.
The company said it would raise about $942 million from the sale of new shares and reserve the rest for the sale of existing shares. SoftBank, one of Oyo’s earliest and biggest backers, is about to sell shares worth over $175 million. Meanwhile, founder Ratish Agravar has no plans to sell anything.
Oyo operates as Uber in the hotel industry, and hoteliers can use its platform to accept digital payments, find the best price for a room, and serve new customers. On the consumer side, users can browse through various hotel options and choose hotels to suit their tastes and budget. Sounds simple, doesn’t it?
Well, it’s not accurate. For a long time, Oyo and its affiliated hotels have been at a loss and have led critics across the industry. Hoteliers say they were fooled by their income because of OYO’s hidden rates. The “minimum guarantee fee” is also controversial.
However, this relationship has improved in the last few months. Oyo, which was hit by a pandemic with a 60% drop in business in 2020, is slowly recovering. With major markets like India, Indonesia, Malaysia and Europe opening up, startups are looking to make up for the lost time and get back on track.
The latest funding round, which valued Oyo an astonishing $9.6 billion, surprised many, including myself, with that valuation. However, it upheld the company’s request for the $12 billion valuation stated in the IPO.
We plan to use over $330 million in IPO funds to pay off our debt. OYO recently raised $660 million in debt.
“In India, Indonesia and Malaysia, hotel stores operated by OYO that joined the platform in 2018 and 2019 will, on average, outperform independent hotels of similar size in India, Indonesia and Malaysia in 2019, respectively. Twelve weeks after joining the OYO platform, hotel stores using OYO are projected to have average revenues for similarly sized independent hotels in India, Indonesia and Malaysia in 2019. In comparison, it generated 1.5 to 1.9 times more revenue on average. In Europe, OYO-powered home storefronts generated average 2019 revenue compared to the estimated average revenue for independent European homes in 2019. I made 2.4 times more money on average,” the filing said.
OYO has reportedly applied for a $1.16 billion IPO and is reportedly seeking a valuation of $12 billion.
Source Link OYO has reportedly applied for a $1.16 billion IPO and is reportedly seeking a valuation of $12 billion.