Hotel chain aggregator OYO is one of the most affected startups in India due to pandemics. The startup is trying to regain its lost market after lockdown relaxation in major parts of India. In the latest development, the hotel room provider has raised an undisclosed amount Microsoft, as reported by Economic Times.
Microsoft Invests in OYO
In a strategic investment, OYO raised undisclosed funding from software giant Microsoft at a valuation of $9 billion. Microsoft is not only the strategic investor in OYO, but Chinese ride-hailing giant Didi Chuxing, Southeast Asian ride-hailing firm Grab and US-based hospitality firm Airbnb are also strategic investors in hotel service startup OYO.
The size of the deal is not yet known but final closure may take place in few weeks.
The current investment round happened after OYO closed a debt financing round of $660 million from Fidelity Investments, Citadel Capital Management, and Varde Partners. It will help Softbank-backed startup to pay its old debts. The startup will also utilize debt financing investment in strengthening its operations and technology further.
The startup is accelerating its preparation to start IPO. In a discussion with Moneycontrol, OYO Group Chief Financial Officer (CFO) Abhishek Gupta said that the startup is getting ready for an IPO.
When Will OYO Start its IPO?
The Indian startup ecosystem is riding high on the IPO success of online food giant Zomato. Paytm is the next much-awaited IPO that will start soon. Since the hotel market is getting better after the end of Covid second wave in India, OYO is also in a hurry to initiate its public offering.
When asked about the preparation and the exact time to launch its IPO, CFO Gupta said, “As you know, there’s a lot of nuts and bolts and background work that needs to be done. Our audit committee and board have asked us to be ready for the public market event by the end of this year and after that, it will be a combination of looking at the overall COVID recovery, the market appetite, market readiness as well as our internal readiness. We have not put a time or date.”
The travel market is regaining momentum globally after the covid vaccination and the reduced covid cases. It will help companies like OYO in this space to go up in terms of valuation and operations.
As of now, OYO has more than 1 lakh hotel partners across 80 countries.
Microsoft, the latest strategic partner of OYO, has invested in major Indian internet firms in India including Flipkart.
As per the internal report, once the current investment deal is over, OYO will use Microsoft’s cloud services to enhance its technological environment.