SoftBank-backed hospitality start-up OYO is in discussions with financial services company InCred to raise $80-90 million from family offices, according to a report by The Arc. The company is open to accepting commitments starting at $2 million each.
A family office is a private wealth management advisory firm that serves ultra-high-net-worth individuals (HNWIs). Unlike standard wealth management firms, family offices offer comprehensive solutions for managing the financial and investment needs of affluent individuals or families.
InCred arranged a call with Oyo’s CEO and founder, Ritesh Agarwal, which was attended by nearly 100 investors. Most of the capital raised will expand Oyo’s business, with the remainder allocated to debt repayment.
Oyo’s management has suggested that half of the targeted $150 million will come from a sovereign fund, though the name has not been disclosed.
In January, Bloomberg reported that Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, was in talks to lead a $400 million fundraising round for Oyo.
The current fundraising efforts are occurring at a valuation of $2.3 billion, significantly lower than Oyo’s peak valuation of $10 billion in 2019. SoftBank had previously reduced Oyo’s valuation to $2.7 billion in 2022.
However, Oyo refuted the valuation figure mentioned in The Arc’s report, stating that they focus on refinancing outstanding debt to enhance profitability.
Oyo has withdrawn its IPO papers but is expected to refile its initial public offering (IPO) after completing its refinancing plans, which aim to raise to $450 million through the issuance of dollar bonds.
