NEW DELHI—OYO Hotels & Homes has revealed 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 toward continued growth in OYO’s market the United States, and in strengthening the company’s position in the vacation rentals business in Europe, according to the company.
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 more than $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.
In a span of six years, OYO has expanded its presence to 80-plus countries around the world.
This fast-paced growth is fueled by the company’s success in China with presence in 338 cities and more than 590,000 rooms, followed by fast-paced growth in Indonesia with presence in 100-plus cities and more than 27,000 rooms; the U.K. with presence in 30 destinations and more than 3,500 rooms; and, more recently, in the U.S., with presence in 60 cities, 21 states and more than 7,500 rooms. This year, the company has seen a 3.8x year-over-year (YOY) growth in revenue in August 2019 (vs. August 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 employs more than 20,000 OYOpreneurs and has created economic opportunities for more than 300,000 local hospitality enthusiasts around the world, according to the company.
Commenting on this development, Ritesh Agarwal, founder & CEO (Global), OYO Hotels & Homes, said, “The continued support of our investors like Softbank Vision Fund, Lightspeed and 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.”
Agarwal added, “I am also happy to share that on a YOY 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% (on a YOY 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.”