OYO Valuation is said to be priced at about $9 billion in its initial public offering after preliminary conversations with potential investors. Initially, the previous year’s report suggested that the valuation Oyo will be targeting would be lower than $12 billion and probably lower than the $10 billion level the startup hit in 2019.
Oyo Hotels and Homes, the startup, founded by Ritesh Agarwal, has discussed offering a discount of as much as 15% on the $10 billion suggested by bankers during early discussions. Backed by The SoftBank Group Corp, Oyo is expected to get the green light to proceed with the offering in the coming days after filing preliminary documents last year. A formal roadshow will begin after market regulators’ approval and determine final pricing.
OYO Valuation Details
The startup aims to raise Rs 8,430 crores through its initial public offering which comprises fresh issuance of equity shares up to Rs 7,000 crores and an Offer for sale aggregating up to Rs 1,430 crores. Oyo IPO will be among the biggest IPOs since Paytm’s entry into the market. In its preliminary filing, the company said it planned to raise Rs 8,430 crore through the sale of new shares and some secondary shares, or those held by existing investors.
Incorporated in 2013 by Ritesh Agarwal as Oravel Stays Private Limited, it soon emerged as the Indian version of Airbnb of the US where people looked for their budget accommodation plans. OYO Rooms is the most familiar term involved whenever a trip is planned in general. The company is targeting a valuation of around $9 billion as per reports.
OYO is a global platform that empowers entrepreneurs and small businesses with hotels and homes by providing full-stack technology. It Brings affordable and trusted accommodation as its commitment that guests can book instantly. The company aims to build an online presence across channels and provide hassle-free operations.
The Covid-19 pandemic was a disaster for the company with restrictions implemented all over. This brought a sudden halt to its expansion plans too. The company was bound to pull back in many markets and laid off thousands of employees. In an interview with Bloomberg TV last year, founder Ritesh Agarwal said the pandemic hit Oyo like a “cyclone”.
The startup has now changed its business model too. It’s now focused on selling software and support services to hotel operators, resorts, and homeowners while providing a platform for travelers to book lodging. Oyo has stopped offering its trusted partners guaranteed revenue. Revenue plunged during the fiscal ended in March 2021, but Oyo made progress toward profitability. Oyo Incurred a loss of Rs 3,930 crore for the fiscal year, compared to Rs 12,800 crore the previous year.