Published on : Saturday, July 20, 2019
Oyo hotels founder has led a $2 billion share buyback in the company, which has transformed the country’s budget-hotel industry and gone global. Oyo Chief Executive Ritesh Agarwal is buying part of the shareholdings of early investors Sequoia Capital and Lightspeed Venture Partners. The buyback, which is still subject to shareholder and regulatory approvals, will be through a Cayman Islands company called RA Hospitality Holdings, and financed by institutional banks and finance partners, the company said.
Munish Varma, managing partner at SoftBank Vision Fund, one of Oyo’s biggest investors said that they have confidence in Ritesh’s vision for OYO and how the team has come together to build a truly global brand from India.
After the deal—which doubles Oyo’s valuation to $10 billion—Mr. Agarwal’s stake in Oyo will rise to 30% from around 10%, a person familiar with the matter said. Softbank put cash into the company as part of this round, increasing its stake from 45% to 48%, the person said. Oyo says it has 1 million rooms across the world.
Ritesh Agarwal, who founded the company when he was 19, created his lodging empire by persuading thousands of unbranded, usually poorly run Indian hotels to put themselves in his hands as franchisees or lessors. Oyo asks owners to upgrade them to meet some basic standards—clean linen and bathrooms, air conditioning, Wi-Fi, breakfast and properly groomed staff—and rents their rooms out at bargain-basement prices. It has expanded to around 80 countries, including the U.S., the U.K., Indonesia and Japan.