“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,” Agarwal said in a statement.
The young founder made headlines in July with plans to spend $2 billion to raise his stake in the company to 30% from about 10%. Japanese banks Mizuho Financial Group Inc. and Nomura Holdings Inc. are bankrolling Agarwal’s share acquisition, according to people familiar with the deal. He is buying some of those shares from Sequoia and Lightspeed, and will carry out the transaction through an entity called RA Hospitality Holdings, Oyo
Agarwal is tripling down on the company he created at a time WeWork’s internal tumult and a string of disappointing IPOs are raising questions about startup price tags. The $10 billion valuation makes Oyo India’s most valuable startup after One97 Communications, the parent of digital payments pioneer Paytm.
E-commerce giant Flipkart
Online Services Pvt was acquired by Walmart Inc. last year in a $16 billion deal. SoftBank’s investments lifted the valuations at Oyo, Paytm
Agarwal founded the startup in his teens after dropping out of college and roaming India on a shoestring budget. The wild, erratic standards at hotels and guest houses he encountered inspired him to start the online service, and the brand now aims to provide travelers a consistent experience.
Oyo mainly signs on hotel owners and then helps them upgrade everything from bathroom fittings to furniture and bedding, and then provides them standardized supplies like sheets and toiletries, and support to train their staff.
It employs hundreds of people in the field who evaluate properties on some 200 factors, from the quality of mattresses and linens to water temperature. To get a listing, along with a bright red Oyo sign to hang street-side as a seal of housekeeping approval, most hoteliers must agree to a makeover that typically takes about a month. Oyo then gets a cut of roughly 25% of every booking. Rooms usually run between $25 and $85.