Microsoft Corporation has invested nearly USD 5 million in the Indian hospitality firm Oyo, reportedly at a valuation of USD 9.6 billion. This investment is likely to be part of a larger round that may see more infusion from Microsoft in the near future.
As per regulatory filings, OYO has alloted 5 equity shares and 80 preference shares to Microsoft Corporation at an issue price of $58,490 per share as a part of its Series F2 round. The round is said to be a precursor to its upcoming $1.2 billion initial public offering.
Founded in 2013 by Ritesh Agarwal, the Gurugram-based company’s valuation had dropped to $8 billion in August 2020 from $10 billion in November 2019. The report came amidst a sharp decline in the businesses of the hospitality sector due to the coronavirus pandemic. Oyo, which is one of India’s most valuable startups, has aggressively expanded to many markets including Southeast Asia, Europe and the U.S. in recent years. The hospitaly chain boasts of network of over 100,000 small hotels and home owners spread across 800 cities in 8 countries.
An extraordinary general meeting of Oravel Stays Pvt Ltd (OYO), which runs the OYO Rooms chain of hotels, on July 16 approved issue of the equity shares and Series F2 compulsory convertible cumulative preference shares (Series F2 CCCPS) for “an aggregate consideration amounting to rupee equivalent of USD 4,971,650 to Microsoft Corporation on a private placement basis”, as per an RoC filing by the company.
The company had raised Rs 5,611 crore or around $800 million in March 2020 at the share price of $51,555.1 per share. The share price has grown by 13.5% to $58,490 in the latest funding.
In July, OYO had announced raising TLB funding of USD 660 million (nearly Rs 4,920 crore) from global institutional investors to be utilised for paring debt and other business investments. TLB refers to a tranche of senior secured syndicated credit facilities from global institutional investors.
