OYO eyes ₹1,000 crore fundraise in significant down round
What's the story
OYO, a leading Indian hospitality startup, is currently in advanced discussions to raise approximately ₹1,000 crore ($120 million).
The primary investors in this round are expected to be family offices of prominent Indian corporate executives and stock market experts.
Among the potential investors are Anand Jain, a former senior executive at Reliance Industries, and Ramesh and Rajeev Juneja, promoter brothers of Mankind Pharma.
Fundraising
OYO's EGM to approve fundraise
OYO is set to hold an extraordinary general meeting (EGM) on Tuesday to approve the fundraise after increasing its authorized share capital.
The proposed round is expected to value the SoftBank Group-backed company at about $2.5 billion, a significant drop from its peak valuation of $9 billion in 2021.
In addition to family offices, OYO is also in final negotiations with Malaysian sovereign wealth fund Khazanah Nasional.
Fundraising details
OYO will consider approving initial fundraise of around ₹500 crore
Ritesh Agarwal, founder and chief executive of OYO, may raise up to ₹300 crore from Khazanah with the rest coming from domestic investors.
Incred Wealth is assisting OYO in pitching the fundraise to high net-worth individuals and has created a special purpose vehicle to issue shares in OYO's parent company to participating family offices.
According to the EGM notice, the startup will consider approving an initial fundraise of around ₹500 crore.
Financial outlook
OYO's recent financial performance and future projections
In a recent post on X, Agarwal revealed that OYO had achieved its first annual net profit of ₹100 crore for FY24.
The company has projected a gross booking value of $1.8 billion for FY25, after closing FY24 at $1.2 billion.
OYO has also informed potential investors that it is on track to achieve an adjusted gross profit of $406 million in FY25, while adjusted EBITDA is estimated at $181 million.