Technology
India’s Oyo, once valued at $10 billion, finalizes new financing at $2.5 billion valuation
Oyo, an Indian budget hotel chain startup, is finalizing a new fundraising of around $100 million to $125 million, bringing its valuation right down to $2.5 billion, two people conversant in the matter told TechCrunch.
This marks a pointy decline in the worth of the Gurgaon-based startup, which was price $10 billion in 2019. The startup, struggling to draw institutional investors, has been aggressively acquiring wealthy individuals in recent months.
“We really think this asset makes a whole lot of sense today. Profitability and discount @70% in comparison with the previous valuation. IPO expected in 18-24 months – a representative of InCred, a financial company cooperating with Oyo, forwarded a message (displayed by TechCrunch) to the startup’s founder.
Early last month, TechCrunch reported that Oyo was looking for to boost funding of $3 billion or less. Oyo vehemently denied the “rumours, including valuation rumors” at the time. The size of the new round is more likely to be larger, said the above-mentioned sources, who asked to not be identified since the matter will not be public.
The new funding comes after Oyo shelved its IPO plan last month. The startup – which counts SoftBank, Peak XV Ventures, Lightspeed, Airbnb and Microsoft amongst its backers – has withdrawn its IPO application from India’s markets regulator, the Securities and Exchange Board of India, twice within the last 4 years.
Oyo initially filed papers with SEBI for a 2021 listing but withdrew it and re-filed in 2023. The company, which has raised over $3 billion thus far, sought to boost $1.2 billion at a valuation of $12 billion as a part of an initial public offering in 2021.
Oyo, once considered one of India’s hottest startups, runs an operating system of sorts that helps hoteliers accept digital bookings and payments. The startup once operated in dozens of markets, including the US and Europe, but has since limited its international presence.
Observed net profit of $12 million within the fiscal 12 months ending March, based on founder and CEO Ritesh Agarwal.
Agarwal took out $2 billion in debt in 2019 to extend his stake in Oyo, then valued at $10 billion. It invested $700 million as core capital in Oyo and spent $1.3 billion on secondary purchase of Oyo shares. The startup has not commented on its debt status since then.
Indian newspaper Economic Times also reported in regards to the new financing on Monday, adding that the startup will seek approval from current shareholders for the financing this week.
Technology
Flipkart co-founder Binny Bansal is leaving PhonePe’s board
Flipkart co-founder Binny Bansal has stepped down three-quarters from PhonePe’s board after making an identical move on the e-commerce giant.
Bengaluru-based PhonePe said it has appointed Manish Sabharwal, executive director at recruitment and human resources firm Teamlease, as an independent director and chairman of the audit committee.
Bansal played a key role in Flipkart’s acquisition of PhonePe in 2016 and has since served on the fintech’s board. The Walmart-backed startup, which operates India’s hottest mobile payment app, spun off from Flipkart in 2022 and was valued at $12 billion in funding rounds that raised about $850 million last 12 months.
Bansal still holds about 1% of PhonePe. Neither party explained why they were leaving the board.
“I would like to express my heartfelt gratitude to Binny Bansal for being one of the first and staunchest supporters of PhonePe,” Sameer Nigam, co-founder and CEO of PhonePe, said in a press release. His lively involvement, strategic advice and private mentoring have profoundly enriched our discussions. We will miss Binny!”
Technology
The company is currently developing washing machines for humans
Forget about cold baths. Washing machines for people may soon be a brand new solution.
According to at least one Japanese the oldest newspapersOsaka-based shower head maker Science has developed a cockpit-shaped device that fills with water when a bather sits on a seat in the center and measures an individual’s heart rate and other biological data using sensors to make sure the temperature is good. “It also projects images onto the inside of the transparent cover to make the person feel refreshed,” the power says.
The device, dubbed “Mirai Ningen Sentakuki” (the human washing machine of the longer term), may never go on sale. Indeed, for now the company’s plans are limited to the Osaka trade fair in April, where as much as eight people will have the option to experience a 15-minute “wash and dry” every day after first booking.
Apparently a version for home use is within the works.
Technology
Zepto raises another $350 million amid retail upheaval in India
Zepto has secured $350 million in latest financing, its third round of financing in six months, because the Indian high-speed trading startup strengthens its position against competitors ahead of a planned public offering next yr.
Indian family offices, high-net-worth individuals and asset manager Motilal Oswal invested in the round, maintaining Zepto’s $5 billion valuation. Motilal co-founder Raamdeo Agrawal, family offices Mankind Pharma, RP-Sanjiv Goenka, Cello, Haldiram’s, Sekhsaria and Kalyan, in addition to stars Amitabh Bachchan and Sachin Tendulkar are amongst those backing the brand new enterprise, which is India’s largest fully national primary round.
The funding push comes as Zepto rushes so as to add Indian investors to its capitalization table, with foreign ownership now exceeding two-thirds. TechCrunch first reported on the brand new round’s deliberations last month. The Mumbai-based startup has raised over $1.35 billion since June.
Fast commerce sales – delivering groceries and other items to customers’ doors in 10 minutes – will exceed $6 billion this yr in India. Morgan Stanley predicts that this market shall be value $42 billion by 2030, accounting for 18.4% of total e-commerce and a pair of.5% of retail sales. These strong growth prospects have forced established players including Flipkart, Myntra and Nykaa to cut back delivery times as they lose touch with specialized delivery apps.
While high-speed commerce has not taken off in many of the world, the model seems to work particularly well in India, where unorganized retail stores are ever-present.
High-speed trading platforms are creating “parallel trading for consumers seeking convenience” in India, Morgan Stanley wrote in a note this month.
Zepto and its rivals – Zomato-owned Blinkit, Swiggy-owned Instamart and Tata-owned BigBasket – currently operate on lower margins than traditional retail, and Morgan Stanley expects market leaders to realize contribution margins of 7-8% and adjusted EBITDA margins to greater than 5% by 2030. (Zepto currently spends about 35 million dollars monthly).
An investor presentation reviewed by TechCrunch shows that Zepto, which handles greater than 7 million total orders every day in greater than 17 cities, is heading in the right direction to realize annual sales of $2 billion. It anticipates 150% growth over the following 12 months, CEO Aadit Palicha told investors in August. The startup plans to go public in India next yr.
However, the rapid growth of high-speed trading has had a devastating impact on the mom-and-pop stores that dot hundreds of Indian cities, towns and villages.
According to the All India Federation of Consumer Products Distributors, about 200,000 local stores closed last yr, with 90,000 in major cities where high-speed trading is more prevalent.
The federation has warned that without regulatory intervention, more local shops shall be vulnerable to closure as fast trading platforms prioritize growth over sustainable practices.
Zepto said it has created job opportunities for tons of of hundreds of gig employees. “From day one, our vision has been to play a small role in nation building, create millions of jobs and offer better services to Indian consumers,” Palicha said in an announcement.
Regulatory challenges arise. Unless an e-commerce company is a majority shareholder of an Indian company or person, current regulations prevent it from operating on a listing model. Fast trading corporations don’t currently follow these rules.
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