The founder of OYO, the Indian unicorn, is so confident that he will buy back $1.5 billion shares


  • The Indian hospitality unicorn OYO’s founder Ritesh Agarwal wants to buy back shares worth $1.5 billion, according to reports.
  • Agarwal holds 9.43% in the hospitality startup, while SoftBank, the Japanese investment firm, controls 45.69% of the company.
  • According to OYO’s clauses, SoftBank cannot take up more than 49.99% in the company without approval from Agarwal and his early investors.
In an unprecedented move in the Indian startup ecosystem, OYO founder Ritesh Agarwal is looking to buy back shares worth $1.5 billion according to an ET report. The report cited sources to say that the founder is looking buy shares from its early investors like Sequoia and Lightspeed Venture Partners, to have greater control of his company.

In an email response, an OYO spokesperson said, “As a company policy, we don’t comment on speculations. We have no further comments.”

Agarwal reportedly wants to raise his stake in the firm to over 30%. Currently, Agarwal holds 9.43% in the hospitality startup, while SoftBank, the Japanese investment firm, controls 45.69% of the company.

The report further says that the founder is looking to raise $2 billion of secured debt through investors in India, Japan and Europe.

Meanwhile, early investor Lightspeed has 13.4% stake, while Sequoia Capital has 10.24%.

According to information sourced by paper.vc, Article 21.6 of Oyo’s Articles of Association prohibit Softbank from, directly or indirectly, acquiring more than 49.99% of the fully diluted share capital of the company, without the consent of Ritesh Aggarwal, Greenoaks, Lightspeed and Sequoia Capital.

SoftBank has been an investor in OYO since a long time now. It was Softbank's investment that led OYO into the Indian unicorn club with a $5 billion valuation in September 2018, a huge jump from the $900 million valuation it had until then.

Reports say that OYO is once again looking at raising funds through debt and primary, secondary transactions, which could take its valuation to over $10 billion.

The Indian hospitality unicorn has been spreading its business fast across the world. It recently became China’s largest hotel chain. OYO said that it will invest $300 million to expand its footprint in the United States – into cities like New York, Los Angeles and San Francisco. It already has 50 hotels across 15 states in the US. It recently launched services in Vietnam.

The six-year-old startup has much higher ambitions in sight – to become the world’s largest hotel chain, as conveyed by its CEO Aditya Ghosh earlier this year.
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