Oyo, once valued at $10 billion, has seen a significant dip in its valuation, now standing at $2.4 billion after a recent funding round. The Gurugram-based startup raised $173.5 million in a Series G funding round, with investments coming from InCred Wealth, Patient Capital, and J&A Partners.
This decline in valuation doesn’t come as a surprise, considering that SoftBank, which owns over 40% of Oyo, had already internally slashed the startup’s value to $2.7 billion earlier this year. Oyo, however, had disputed this markdown, stating that there was no rational basis for it.
Despite the decrease in valuation, Oyo still boasts an impressive list of backers, including SoftBank, Airbnb, Peak XV Partners, Microsoft, and Lightspeed Venture Partners. These investors have shown confidence in the startup, despite the recent challenges it has faced.
One of these challenges was Oyo’s withdrawal of its draft red herring prospectus for an initial public offering (IPO) for the second time this year. The Indian startup had originally filed for an IPO in 2021, aiming to raise around $1.2 billion at a valuation of $12 billion. However, the regulatory body, SEBI, has not yet approved Oyo’s application for an IPO.
The decrease in valuation and the withdrawal of the IPO indicate that Oyo is currently facing some obstacles in its growth trajectory. However, it is important to note that the startup still has significant financial support from its investors, which indicates a level of faith in its potential for future success.
It remains to be seen how Oyo will navigate these challenges and whether it will be able to regain its previous valuation. In the highly competitive hospitality industry, Oyo will need to demonstrate its ability to adapt and innovate to stay ahead of the curve. With its strong backing and experienced investors, Oyo has the potential to make a comeback and solidify its position as a key player in the Indian startup ecosystem.