OYO founder Ritesh Agarwal to buy back stake worth $1.5B in the hospitality unicorn, gets CCI approval
Ritesh Agarwal, Founder and CEO of OYO Hotels and Home, on Friday stated that he has signed a $1.5 billion round through RA Hospitality Holdings (Cayman), to further increase his stake through purchase of fresh equity, as well as, buyback of shares in the hospitality unicorn.
In a recent development, the Competition Commission of India (CCI) has also approved the same, giving Agarwal a go-ahead. Further, the founder is fueling in $500 million in his own company.
Factors like the company’s strong growth, improved margins and improvements in customer experience has led to this landmark agreement, which is one of the firsts in the country. As a part of the transaction, Lightspeed Venture Partners and Sequoia India are helping Agarwal increase his stake, while remaining invested and committed to the company’s long-term mission, a statement from the chain said.
Ritesh Agarwal said,
“It is a very exciting time for OYO right now as we make great living spaces come alive across all corners of the world from Texas to Tokyo. I am deeply humbled and delighted to have gotten the support of all our investors, the board and above all the institutionalised financial partners that have provided the necessary financial support towards realising this vision. Needless to say, the deal remains subject to shareholder and regulatory approvals."
Munish Varma, Managing Partner at SoftBank Vision Fund, said in the statement, “We have confidence in Ritesh’s vision for OYO and how the team has come together to build a truly global brand from India. It has been an exciting journey so far and we hope to achieve many more milestones together in the time to come.”
Mohit Bhatnagar, Managing Director at Sequoia Capital India said,
"It's been five years since Sequoia India first partnered with Ritesh and his team. Today our footprint stands at one million rooms across India, China, Southeast Asia, Europe, and now the US. This is the kind of stuff startups and ventures investing dreams are made of. But make no mistake, OYO has been built on the back of an audacious and ambitious founder’s vision, and unrelenting hard work and sacrifices by thousands of OYOpreneurs across the globe. They are the true architects of this disruptive company. We remain committed to supporting this world-class management team as they continue to create living spaces across the world."
In 2019, the company has seen a 4.4x year-on-year revenue growth, with one million rooms under management across hotels and homes and 2,00,000 rooms in India. In other news, OYO Hotels and Homes has recently acquired Delhi-NCR-based Innov8 for Rs 220 crore, and made its entry in the coworking space.
(Edited by Evelyn Ratnakumar)