Oyo founder Ritesh Agarwal’s buyback of shares lifts company’s valuation to $10 bn

Ritesh Agarwal is investing $700 million in OYO as part of its latest $1.5 billion funding round.

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After the last round of fund raising where OYO raised around $1 billion, the company is again raising funds and this time it’s going to be a higher amount, $1.5 billion. A large part of this, $700 million, will come from the promoter of OYO, Ritesh Agarwal in the form of buyback of shares from some of the early stage investors in the company.

This is the Series F round of fund raising for the hospitality major with international footprints and takes its valuation to over $10 billion, as per a Mint report. Observers point out that this $1.5 billion funding in one go is one of the highest in the context of Indian startups. The highest investment before this came from SoftBank when it put $2.5 billion in Flipkart in 2017. Interestingly, SoftBank is also participating in this investment round in OYO.

Besides Agarwal and SoftBank, existing investors, Airbnb and GreenOaks Capital will also be picking up part of the remaining $800 million tab. The $700 million from Ritesh Agarwal’s end will come via RA Hospitality Holdings (Cayman). Some of the investors divesting their holdings in OYO to the founder include Lightspeed Venture Partners and Sequoia India.

This process of buyback by Ritesh in OYO Hotels and Homes is likely to continue since he has expressed his intention to buy back up to $2 billion worth equity and strengthen his hold on the firm. The necessary approvals from the Competition Commission of India have also been obtained by RA Hospitality Holdings, according to reports.

The hospitality firm has over 35,000 hotels and 1.2 million rooms under its management, apart from 125,000 vacation homes. The startup has raised around $3 billion so far.

With a valuation of $10 billion, OYO becomes the second most valued Indian startup after Paytm.