Oyo’s value falls by over 75% on new funding

Oyo, once the second-most useful Indian startup at $10 billion, has seen its valuation drop to $2.4 billion in a new funding round, multiple sources told TechCrunch.

The Gurugram-based startup has raised $173.5 million in a Series G funding round. InCred Wealth, Patient Capital, and J&A Partners invested within the new round.

Oyo’s current valuation is lower than its total capital raised, which is around $3.3 billion in combined equity and debt funding, in response to data analytics platform Tracxn.

TechCrunch reported in May that Oyo was searching for a funding round that would lower its valuation to $3 billion or less. “We deny all rumors, including the valuation reported in the article,” a spokesperson for the budget hotel chain told TechCrunch in May. “There is no concrete transaction at this stage, let alone any discussion about valuation.”

The valuation cut is just not a surprise. SoftBank, which owns greater than 40% of Oyo, had internally lowered its valuation of the Indian startup to $2.7 billion in 2022. Oyo had said on the time that it had “no rational basis” for lowering its valuation.

Oyo’s sponsors include SoftBank, Airbnb, Peak XV Partners, Microsoft and Lightspeed Venture Partners.

The new funding comes after Oyo withdrew its draft prospectus for an initial public offering for the second time earlier this yr. The Indian startup had originally filed paperwork to go public in 2021, searching for to lift about $1.2 billion at a valuation of $12 billion on the time.

Indian market regulator SEBI has not approved the startup’s IPO application.