Oyo, the India-based accommodation platform backed by corporates Airbnb, Didi Chuxing, Hero Enterprise, Huazhu Hotels Group, Microsoft and SoftBank, filed yesterday for an Rs 84.3bn ($1.16bn) initial public offering.
The company will issue up to $942m in new shares while the rest will come from secondary transactions involving existing investors. Telecommunications and internet group SoftBank plans to divest more than $175m of its stake.
Founded in 2013, Oyo has built an online platform that helps users book short-term accommodation in locations including India, the United States, the UK, Japan and other countries in Europe, Southeast Asia, the Middle East and Latin America.
The company is also looking to raise $193m in a pre-IPO share placement and will use $330m of the proceeds from the offering to settle its debt and conduct strategic mergers and acquisitions.
Software provider Microsoft provided $5m for Oyo in August this year, valuing the business at $9.6bn. The deal came after a $1.5bn round in November 2019 featuring SoftBank Vision Fund’s SVF India Holdings unit and Oyo founder and CEO Ritesh Agarwal’s RA Hospitality Holdings vehicle.
SoftBank Vision Fund had led a $1bn round in February 2019, investing alongside ride hailing service Didi Chuxing, Sequoia Capital and Lightspeed Venture Partners and lifting Oyo’s overall funding to $1.45bn. It then secured between $100m and $200m from peer Airbnb two months later.
Huazhu Hotels Group, the hotel chain operator previously called China Lodging, supplied $10m in September 2017, the week after the company had secured $250m from Vision Fund, insurance and aerospace component provider Hero Enterprise, Lightspeed, Sequoia and Greenoaks Capital.
SoftBank had invested $62m in Oyo the previous year at a $460m valuation. It had led a $100m series B round in 2015, participating together with returning backers Lightspeed, Sequoia Capital India and Greenoaks, while DSG Consumer Growth and Venture Nursery are among Oyo’s earlier investors.
Kotak Mahindra Capital, JP Morgan India, Citigroup Global Markets India and Link Intime India are global coordinators and lead underwriters for the offering. They are joined by lead book-running managers ICICI Securities, Nomura Financial Advisory and Securities (India), JM Financial and Deutsche Equities India.
