The Indian discount hotel chain doubles valuation to $10 billion

Oyo, the SoftBank-backed discount hotel chain whose soaring valuation has drawn comparisons to WeWork, has raised $1.5 billion from investors including its 25-year-old founder Ritesh Agarwal. In July, Mr Agarwal announced that he would lead a $2 billion investment in his own company. The unusual deal doubles Oyo’s valuation to $10 billion and raises Mr Agarwal’s stake in the company to 30 per cent. Of the $2 billion, Mr Agarwal spent $1.3 billion on a secondary purchase that saw US backers Lightspeed Venture Partners and Sequoia Capital partly cash out. The remaining $700 million will be invested in the financing round announced yesterday… Already the largest hotel chain in India, Oyo has expanded rapidly and now has a presence in 80 countries and more than 1.2 million rooms. Roughly half of them are in China, where it launched two years ago. It also recently announced a $300 million investment in the US, where it has 50 hotels… The company has attracted a number of overseas investors, most notably SoftBank’s Vision Fund, which last year led a $1 billion funding round in Oyo. Airbnb is also an investor… Oyo’s business model is to turn existing hotels into its franchisees and promote and fill them as efficiently as possible through an online booking site.

Stephanie Findlay