Oyo still has $1b in cash as pandemic-hit 2020 ends

The budget hotel chain “continued to hold on to close to a billion dollars of cash,” said its founder Ritesh Agarwal in a town hall last week.

“We’ve been very disciplined in making sure that we can respond to the crisis in a good way to try and ensure that we can come out of it at the right time,” he shared in a separate event.

Earlier in May, Oyo said it would lay off about 5,000 to 25,000 people in China, the US, and India to cut its spending and boost profitability. The chief exec also revealed in April that Oyo’s revenues and occupancy rates have dropped by over 50% to 60% during the pandemic.

However, Agarwal said during the town hall that the company has been recovering well as the year nears its end.

“Together globally, we were able to get to around 85% of the gross margin dollars of our pre-Covid levels,” Agarwal added. He also unveiled that the company has its sights set on an initial public offering but didn’t give out a timeline for it.

The budget hotel startup was valued at US$10 billion after it received a US$1.5 billion commitment from SoftBank last year. The valuation, however, is projected to fall to US$6 billion post-Covid-19.

In February this year, before the pandemic’s spread across the region, Oyo reported a loss of US$335 million for the financial year ended in March 2019, widening from the US$52 million loss it posted a year earlier. Meanwhile, its revenue grew a little over 4.5x to US$951 million.