Oyo’s valuation plummets to $2.4 Billion with Series G funding round

Oyo, the Indian hospitality startup once valued at $10 billion, has seen its valuation drop significantly to $2.4 billion, according to sources cited by TechCrunch. This valuation decrease comes as the company closes a Series G funding round, raising $173.5 million. Key investors in this round include Patient Capital, led by Oyo founder and CEO Ritesh Agarwal; InCred Wealth, a capital pool from high-net-worth individuals; and J&A Partners.

The current valuation of Oyo now falls below the total capital the company has raised, which is approximately $3.3 billion, as reported by Tracxn. This total includes both equity and debt financing. The steep decline from its previous valuation underscores the financial challenges the company faces.

In May, TechCrunch reported that Oyo was looking to raise funds at a valuation potentially as low as $3 billion. At that time, a spokesperson for Oyo denied such rumors, asserting that there were no concrete discussions about valuation. The company has not provided a comment in response to recent developments.

Oyo’s financial trajectory has been turbulent, marked by controversies and shifting investor sentiments. Ritesh Agarwal, who has previously committed substantial funds to the startup, invested $1.5 billion in Oyo in 2019 when its valuation stood at $10 billion. The specifics of how this capital was secured and the terms of the investment have not been disclosed by Oyo.

The current valuation cut follows a previous internal markdown by SoftBank, which owns over 40% of Oyo. In 2022, SoftBank had reduced its valuation of Oyo to $2.7 billion, a move that Oyo contested at the time, labeling it as lacking “rational basis.”

Oyo’s business model, which focuses on budget hotels, has faced various hurdles, contributing to the decline in its valuation. Despite its extensive global presence, the startup has struggled with operational and financial challenges, reflecting broader difficulties within the hospitality industry.

The Series G funding round, while providing a much-needed cash infusion, highlights the significant depreciation in Oyo’s market value. The ongoing financial and operational issues underscore the volatility in the startup’s journey as it navigates a challenging business environment. Once touted as the first Unicorn of India, this company has been facing challenges ever since.