We don't Work under Softbank's guidance, insists OYO Board member

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We don't Work under Softbank's guidance, insists OYO Board member
  • OYO’s crisis has often been compared to that of SoftBank’s other investment – WeWork.
  • Board member Aditya Ghosh said OYO has a good relationship with SoftBank and "there has been no change in that because of what has happened at another company.
  • Ritesh Agarwal-led OYO reported a loss of $335 million in FY19, thanks to its international expansion.
Indian hospitality unicorn OYO just posted a $335 million loss for FY19. Even before they released these numbers, the founder Ritesh Agarwal has been saying that they have now ‘shifted’ focus to profitability.

However, there have been rumours in the market that its investor Softbank has been to turn towards profitability.

“Our relationship with Softbank is that of a good shareholder, there has been no change in that because of what has happened in another company. It’s a board-governed company, no particular shareholder gives us any guidance. You put up an annual operating plan and work very hard to deliver on that,” said Aditya Ghosh, board member, OYO during a conference call with reporters last Monday.

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OYO was once touted as SoftBank’s hot investment and was growing at breakneck speed until it hit brakes recently. After multiple troubles, naysayers have been comparing OYO to yet another of its investor Softbank’s bets - WeWork.

The excessively leveraged US-based realty company went under last year as it looked to file for an IPO, bringing ignominy in addition to losses. As its financials were questioned, its value dropped from $47 billion to $8 billion.

After this, every one of Masayoshi Son’s investments were questioned. After hoteliers complaints of non-payments and firing employees, OYO came under an unwanted spotlight.

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‘No bearing on operations’

While OYO is another realty bet by Softbank, it refuses to be compared to it. In a conference call with reporters to discuss its financials yesterday, OYO said that other investments of the Japanese major, have no bearing on its operations.

After being under the scanner after hoteliers complained of non-payment of dues and other issues, OYO however has been cleaning the house. The company claims that the FY19 losses were on the back of its international expansion and is on recovery mode. Addressing all reports, founder Agarwal had written a blog saying that the company has entered 2020 with a new vigour and will now focus on profitability.

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“That’s really what it is – building a business that is financially sustainable, that is showing profitable growth. These recent developments are what we have learnt from, and made sure that we focus on the fundamentals of the business,” Ghosh too said in the conference call.

See Also:
OYO reveals numbers to show that the cash burn had reduced sharply even before the mass layoffs
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