Oyo secures $807m from SoftBank, RA Holdings

Oravel Stays, the parent company of Indian budget hotel chain Oyo, has received US$807 million from two of its backers as part of its ongoing US$1.5 billion round, regulatory filings show.

Oyo founder and CEO Ritesh Agarwal / Photo credit: Oyo

According to the filings accessed by research firm Tofler, the company has allotted a total of 15,325 series F compulsorily convertible cumulative preference shares at US$52,643.22 apiece.

SoftBank’s SVF India poured in roughly US$507 million, while RA Hospitality, the investment entity controlled by Oyo founder and CEO Ritesh Agarwal, has put in US$300 million.

As a result, SVF India will hold a 50.6% stake in Oyo and RA Holdings will have 25.87%. Entrackr estimates that the round values Oyo at US$7.7 billion.

An Oyo spokesperson confirmed the investment to Tech in Asia, saying that the company will use the additional funds to achieve its 2020 objectives, which include “accretive and sustainable growth, operational excellence, and investment in corporate governance and training.”

In October last year, Oyo said it would be raising US$1.5 billion in its series F round to strengthen its businesses in the US and Europe. Of that figure, Agarwal himself will be investing US$700 million through RA Hospitality, while existing investors will supplement the remaining amount.

The latest development follows a series of layoffs across Oyo’s offices in an effort to boost profitability and slow down spending.

Bloomberg recently reported that Oyo intends to cut about 5,000 to 25,000 jobs in China, the US, and India. “By the time our restructuring process is complete, Oyo will have over 25,000 employees worldwide,” Agarwal said.

The company reported widening losses at US$335 million for the financial year that ended in March. It also posted a 4.5x increase in revenue at US$951 million for the period.