Softbank resuscitates Oyo, to pump in $90 million
- Funding drought ends for Oyo Rooms, Softbank to pump in $90 million
- Oyo has already received $61 million with the rest of the money slated to come in soon
- The rest of $29-million will also be largely pumped in by existing investors led by SoftBank
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Budget hotel aggregator Oyo is closing a $90-million financing round, split into two tranches, led by its largest shareholder SoftBank Corp, people familiar with the matter said. According to a report in the Times of India, the company has already received $61 million with the rest of the money slated to come in soon. The $29-million part, a mix of equity and debt, will also be largely pumped in by existing investors led by SoftBank. Oyo is picking up $5 million in debt financing from InnoVen Capital, sources privy to the matter told TOI. The budget hotel aggregator's valuation has remained flat at around $400 million, pre-money. A pre-money valuation is a term widely used in private equity or venture capital industries, referring to the valuation of a company or asset prior to an investment or financing. If an investment adds cash to a company, the company will have different valuations before and after the investment. Oyo's other investors include Sequoia Capital and Lightspeed Venture Partners, among others.
Venture Nursery, the first investor in Oyo Rooms, has cashed out of the company amid differences which cropped up between the two last year. The Mumbai-based accelerator, which held around 2% stake in Oyo, has exited netting Rs 60 crore in a secondary sale of shares. It had put Rs 25-30 lakh in the startup's first avatar Oravel Stays — an Airbnb clone — between 2012-13. A secondary sale is when an existing investor sells shares to a new one or the promoter at the company's current valuation, but the money does not come into the company.
The Gurgaon-based firm had picked up a $100-million cheque just a year ago led by SoftBank when it was valued at $400 million, post money, amid a frenetic fund-raising environment. This latest infusion has come about after many months of Oyo being in the market to shore up capital.
When contacted, Ritesh Agarwal, the 23-year-old founder of Oyo Rooms, did not respond to TOI's query on the development, while a mail sent to Sharvan Shroff and Ravi Kiran, co-founders of VentureNursery, did not elicit a response till the time of going to press.
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