Bengaluru, NFAPost: The deicision of Microsoft to back Indian budget hotel chain OYO comes at a time when the hospitality industry is bleeding because of the second wave of covid-19.
According to sources familiar with development, Microsoft has valued the Indian startup at about $9 billion and the sise of investment is not disclosed.
SoftBank, a major investor in Oyo, valued the company at about $10 billion in 2019. But the Japanese investment firm slashed the Indian startup’s valuation to $3 billion in recent quarters.
Microsoft and Oyo founder and chief executive Ritesh Agarwal declined to comment on the development. According to Arvian Consulting, the proposed investment will pave the way for Oyo availing Microsoft cloud service.
Oyo, which is one of India’s most valuable startups, has aggressively expanded to many markets including Southeast Asia, Europe and the US in recent years. The company recently faced backlashed because of alleged toxic culture, some lapse in governance, and relationships with many hotel owners.
Ritesh Agarwal said the pandemic hit the company like a cycloe and slowed the secen year old startup growth plans and laid off thousands of employees globally. “We built something for so many years and it took just 30 days for it drop by over 60%. We have not made any decision on exploring the public markets,” said Ritesh Agarwal.
Airbnb-backed Oyo had between $780 million to $800 million in its bank\its monthly burn” across all businesses to $4 million to $5 million. (The startup had about $1 billion in the bank in December 2020.) Earlier this month Oyo said it had raised $660 million in debt.