Hospitality startup Oyo aims to raise approximately Rs 1,000 crore ($120 million) in a new funding round, targeting investments from the Indian corporate executives and stock market experts, The Economic Times reported.
This latest fundraiser will see Oyo‘s valuation drop by 72% from its 2021 peak of $9 billion to $2.5 billion, pending approval at the company’s extraordinary general meeting (EGM) on Tuesday.
Potential investors include Anand Jain, corporate strategy advisor, Ramesh and Rajeev Juneja, promoter Mankind Pharma, and Utpal Sheth, a close associate of the late Rakesh Jhunjhunwala. Additionally, Oyo is in the final stages of discussions with Khazanah Nasional, a Malaysian sovereign wealth fund, which is negotiating for specific rights before finalizing its investment.
“The order book from family offices is now at around Rs 1,000 crore. Oyo also wants to allocate a piece to Khazanah Nasional, as it’s a sovereign wealth fund and adds more credibility to the cap table,” stated a person familiar with the deal. Ritesh Agarwal, founder and CEO of Oyo, may secure Rs 250-300 crore from Khazanah, with the rest coming from domestic investors.
Incred Wealth is assisting Oyo in pitching this fundraise to high-net-worth individuals, having created a special purpose vehicle to issue shares in Oyo’s parent company to participating family offices. The EGM notice suggests that the startup will consider an initial fundraise of around Rs 500 crore, with the total funding expected to close by the end of the month.
Average investments from are anticipated to range between Rs 15-30 crore, with some potentially investing more. Investors believe they can achieve substantial returns if Oyo goes public at a higher valuation in the future.
Ritesh Agarwal has been actively engaging with potential investors through webinars and one-on-one calls to elaborate on his business strategy and company plans. In 2022, SoftBank, Oyo’s largest investor, marked down the company’s valuation to $2.7 billion from $3.4 billion, although these figures were not publicly disclosed by the Japanese conglomerate.
