Softbank Group Corp. and Airbnb Inc. backed Oyo Hotels and Homes will raise ₹8,430 crore through the Initial Public Offering (IPO) route. With this, Oravel Stays Pvt. Ltd. joins the bandwagon of homegrown startups tapping the public markets.
According to the DRHP filing, Oyo would raise ₹7,000 crore through the public offering. The rest ₹1,430 crore amount will be raised via an offer of sale from existing shareholders. Ritesh Agarwal- CEO of Oyo rooms, will not reportedly sell any shares in the offering, while Softbank will offload a small stake.
Agarwal, the 27-year old entrepreneur and a college dropout, established Oravel Stays(Oyo) in 2013 which offers an operating system that helps hoteliers accept digital bookings, payments, determine the best pricing for a room, and integrates with third-party booking services.
With the investment of ₹200 crore in 2019, Agarwal, tripled his stake in the startup and expanded the business in Malaysia, Indonesia and Europe. The budget lodgings also offer stays in China, the U.S. and dozens of other countries.
The start-up, like the rest of the hospitality sector, experienced a tough 2020, owing to the pandemic. It had to put its global expansion plans on hold and faced difficulties while making inroads in China and South America.
Meanwhile, the company has managed to script a recovery and reduce its losses. As reported in the DRHP, the company’s loss reduced to ₹3,943 crore in FY21 from ₹13,122 crore a year ago. In the same period, the revenue contracted from ₹13,168 crore to ₹3,961 crore.
Oyo is the latest Indian unicorn to file its intent to go public after food delivery startup Zomato’s stellar listing. A number of other premier Indian start-ups including, digital payments company Paytm and the online beauty products retailer Nykaa, have filed their respective DRHPs.
Did You Know:
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More than 2/3rd of Oyo's workforce is based out of India
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Oyo app has been downloaded around 10 crore times
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9 million users in Oyo's loyalty program