Oyo’s precarious rise from $1b to $10b in valuation

ABOUT

Oyo was pretty obscure in the first four years of its life, but SoftBank’s involvement changed all that.

Within two years, the Indian hospitality startup grew into a unicorn. In another two years, it became a decacorn.

Its eye-popping valuation, however, could land Oyo in hot water.

WHY IT MATTERS

Oyo’s latest round, valuing it at US$10 billion, was unusual because its founder, Ritesh Agarwal, was borrowing as much as US$700 million to buy back shares in his company.

The round was also being negotiated even as WeWork’s problems were surfacing and before Oyo’s own troubles emerged.

With its losses widening in tandem with revenue, Oyo will need to prove that its business model is workable, let alone justify its hefty valuation.

Doing so won’t be easy. Even as Oyo eyes a global conquest, homegrown competitors may win local battles and force it to retreat.

Perhaps being a regional giant isn’t so bad, after all.

SOURCE

Infographics: Christine Toh
Analysis: Terence Lee, Editing: Eileen C. Ang