Hotel aggregator Oyo Rooms is in talks to raise about $300-500 million (Rs 2,0003,330 crore) from Softbank Vision Fund, according to three people aware of the negotiations, which could result in the largest financing round in India’s startup sector since November 2015.
The deal, if successful, could value the Gurgaon-based startup-founded in 2012 by 23year-old Ritesh Agarwal when he was still a teenager-at $1.2 billion (Rs 8,000 crore) making it the latest member of the Unicorn club.
The large capital infusion will give Oyo Rooms the muscle to compete with rivals like the Makemytrip-Ibibo combine as well as counter newer threats from overseas players like Priceline-owned Bookings.com, said investors tracking the space.
The deal will also give Softbank-founded by Masayoshi Son-a larger role in the Indian travel market, where online penetration is much higher as compared to retail. Softbank is the largest investor in the beleaguered online marketplace Snapdeal.
“Besides Softbank, other new or existing investors may also invest in the round,“ said the source directly familiar with the development. “Oyo is getting a pre-money valuation of $700-750 million.“ Pre-money valuation is the worth of a company before the capital is infused. Oyo was valued at $460 million when it last raised capital in August 2016.
Softbank will likely hold over a 50% stake in Oyo if the transaction goes through, said the three people cited above.