Oyo to raise $1.5b in series F round

Oyo Hotels & Homes said it is raising US$1.5 billion as part of its series F funding round. Founder and CEO Ritesh Agarwal will be investing US$700 million through RA Hospitality Holdings, while other existing investors will supplement the remaining US$800 million.

Photo credit: Oyo

A significant part of the funds will be diverted toward continued growth in Oyo’s business in the US and in strengthening the company’s position in its vacation rentals business in Europe, the company said in a statement.

Earlier this year, RA Hospitality Holdings received approval from the Competition Commission of India (CCI) to invest US$2 billion in Oyo.

To facilitate the transaction, Lightspeed Venture Partners and Sequoia Capital are selling part of their shares in Oyo to help Agarwal increase his stake.

“With the CCI approval now in place, the company will get a capital infusion of approximately US$1.5 billion to support this mission, supported by me and other shareholders,” Agarwal said.

In September 2018, Oyo had raised over US$1 billion from SoftBank Vision Fund in its last financing round, with participation from existing investors Lightspeed Venture Partners, Sequoia Capital, and Greenoaks Capital and support from new strategic partners like Airbnb.

Agarwal said the company has seen a 3.8x year-on-year growth in revenue in August 2019 and a 50% improvement in its EBITDA. And Oyo claims it now has 1.2 million rooms under management, attributing its growth to its success in China (590,000 rooms), Indonesia (27,000 rooms), the UK (3,500 rooms), and the US (7,500 rooms).