Tuesday 15 October 2019
 
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Oyo Hotels seeks to raise $1.5bn in new round of financing

DUBAI, 8 days ago

Oyo Hotels & Homes, the world’s fastest-growing chain of hotels, homes & living spaces, has announced that it is raising $1.5 billion as part of its Series F funding round.

As a part of this round, RA Hospitality Holdings’ will infuse approximately $700 million as primary capital in the company, with the balance $800 million being supplemented by other existing investors. A significant part of the funds will be diverted towards continued growth in Oyo’s fastest-growing market the US, and in strengthening the company’s position in the vacation rentals business in Europe.

Earlier this year, RA Hospitality Holdings’ received CCI approval to invest $2 billion in Oyo. In order to facilitate this transaction, Lightspeed Venture Partners and Sequoia are selling part of their shareholding in Oyo to help the founder increase his stake while remaining invested and committed to the company’s long-term mission.

Prior to this, Oyo had raised over $1 billion in its last financing round, announced on September 2018, led by SoftBank through SoftBank Vision Fund, with participation from existing investors Lightspeed Venture Partners, Sequoia and Greenoaks Capital and supported by new strategic partners like Airbnb.
 
Oyo Hotels & Homes’ has emerged as the world’s second-largest hotel, and fastest-growing chain of hotels, homes, living and workspaces, leaving behind several traditional and long-standing hospitality brands. In a short span of six years, Oyo has expanded its presence to 80+ countries around the world. This fast-paced growth is fuelled by the company’s success in China with presence in 338 cities and over 590,000 rooms, followed by fast-paced growth in Indonesia with presence in 100+ cities and over 27,000 rooms, the UK with presence in 30 destinations and over 3,500 rooms, and more recently in the US, with presence in 60 cities, 21 states and over 7,500 rooms. This year, the company saw a 3.8x year-on-year growth in revenue in August (vs. Aug 2018), with 1.2 million rooms under management across hotels and homes. The company already has a strong balance sheet of $2 billion across group companies, a significant part of which will be further invested in the business, given the company’s focus on maintaining its growth momentum.

The company already employs over 20,000 Oyopreneurs and has created economic opportunities for over 300,000 local hospitality enthusiasts around the world.

Commenting on this development, Ritesh Agarwal, founder and CEO (Global), Oyo Hotels & Homes, said: “The continued support of our investors like Softbank Vision Fund, Lightspeed, Sequoia Capital is a testament to the love, trust and relentless support of our asset owners and customers, hard work of all Oyopreneurs, and our commitment to making #LivingTheGoodLife a reality for over 3.2 billion middle-income people around the world. With the CCI approval now in place, the company will get a capital infusion of approximately $1.5 billion to support this mission, supported by me and other shareholders.”

“I am also happy to share that on a Year-on-year basis, we have seen that not only are we operating profitably at the building level but at the same time our EBITDA has also improved by 50 per cent (on a year-on-year basis). The losses as a percentage of NRV have also been on a steady and significant declining curve. The growth across verticals in India and globally has been phenomenal and we truly believe that we will be able to build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability. Our immediate goal however is to make forward looking investments so we can achieve our mission, while delivering on our fiduciary responsibility to our investors by building a sustainable business,” added Agarwal. - TradeArabia News Service




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