Softbank-backed OYO is looking to file an initial public offering next week, according to sources familiar with the matter, who requested anonymity. The initial public offering is tentatively pinned at between $1 billion and $1.2 billion, the sources said, adding that it will consist of a fresh issue of shares, and an offer for sale from existing shareholders.
With the latest development, the seven-year-old budget hotel chain giant joins a handful of firms in the world’s second-largest market that are working to explore the public markets. In July, food delivery firm Zomato made its debut as a public company. A handful of other companies including Paytm, PolicyBazaar, equity firm Nykaa, and Softbank-backed ride-hailing firm Ola, also plan to list on India’s stock exchanges.
Like most others in the travel and hospitality business, Oyo was drastically hit by the pandemic. “We built something for so many years and it only took 30 days for it to drop by more than 60 percent”, Chief Executive Officer of OYO, Riteish Agarwal, had said. Due to the strict lockdowns induced by the pandemic, OYO’s operations were slowed, and in response, it was forced to lay off thousands of employees. The company has however recovered considerably in recent months, due to the relaxation of COVID-19 restrictions, as more people get vaccinated.
Over the years, OYO has grown to become one of the largest hotel chains in the world, with its presence spread across India, Southeast Asia, Europe, and the United States. The startup is renowned for its operating system with which it provides excellent hospitality services. Using its technology stack, OYO helps hoteliers accept digital bookings and payments. It also helps hoteliers determine the best price for a room and helps them with discoverability and integrations with third-party hotel booking services such as booking.com and MakeMyTrip.
The firm counts major companies such as SoftBank, Lightspeed Partners, and Airbnb as part of its investors. Recently, Microsoft entered into a “multi-year strategic alliance” with OYO, to work with the startup to jointly develop travel and hospitality products and technology. In a press release, the Windows maker confirmed that it also made a strategic equity investment in OYO, but did not disclose the amount.
OYO was most recently valued at $9.6 billion, making it one of the most valuable South Asian startups. The terms of the company’s initial public offering are subject to change, as the startup may take an additional few days to file the paperwork.