Hotel chain Oyo from India has filed for an initial public offering in the hopes of raising $1.16 billion –83 billion rupees– with new shares worth 7 billion rupees, as per a draft submitted to the country’s market authority. The travel start-up is backed by the likes of SoftBank Vision Fund, Lightspeed Venture Partners, and Sequoia Capital India.
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Hotel Chain Oyo Files For IPO
According to CNBC, existing shareholders could sell shares worth up to 14.3 billion rupees. Further, “Oyo would also consider issuing shares worth up to 14 billion rupees ($193 million) in a pre-IPO placement.”
With the IPO, the company headquartered in Gurugram is looking to paying current debts and boost its growth in the travel industry, also without discarding any mergers and acquisitions along the way.
Oyo offers hotels the possibility to accept online bookings and payments through its platform, and despite focusing on Asian markets such as India, Indonesia, and Malaysia, the company has expanded to the U.S. and Europe, the latter being one of its key markets.
In January 2020, however, the company’s soaring growth came into question as The Times reported on Oyo being able to “bump up the number of listings on its website by including rooms from unavailable hotels.”
Many of those rooms listed were from unlicensed hotels and guesthouses, CNBC reported back then.
Way To Recovery
Hotel chain Oyo had a rough 2020 when the pandemic hit, despite a $10 million valuation at the beginning of that year –which the company started with 10,000 employees and finished with less than 2,500.
Most of those dismissed were part of the renovations and operations department, as reported by Money Control.
Oyo turned to charging the hotel associates a share of the whole revenue they earned on their properties, and announced it would “cease to offer a minimum guarantee or even provide management staff at the hotel premises, something it used to do with the aim of maintaining consistency and to monitor quality.”
Like most companies in the travel and hospitality industry, Oyo was harshly affected by COVID-19, but has significantly recovered in recent months.
In 2015, SoftBank invested $100 million in Oyo in a Series B round, becoming the lead investor in every round since then. “SoftBank poured another $162 million in 2016, $250 million in 2017, and $1 billion in 2018.”