OYO’s Ritesh Agarwal sets a new benchmark – invests $2 billion into his own company to increase his stake
Ritesh Agarwalthrough his Cayman-registered company RA Hospitality Holdings, has invested $2 billion into OYO.
- OYO’s early investors
Lightspeed Venture Partners, and Sequoia Indiaare selling part of their stake in the company to increase Agarwal’s stake.
- The company also claims that its revenue grew 4.4 times in June 2019 as compared to June 2018.
In a first for the Indian startup community, OYO founder Ritesh Agarwal invested $2 billion into his own company. Agarwal made the investment through a Cayman-registered company, RA Hospitality Holdings.
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OYO’s early investors Lightspeed Venture Partners, and Sequoia India are selling a part of their stake in the company back to him.
“It is a very exciting time for OYO right now as we make great living spaces come alive across all corners of the world from Texas to Tokyo. The deal remains subject to shareholder and regulatory approvals,” said Ritesh Agarwal, Founder & CEO (Group), OYO Hotels & Homes.
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. 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 Aggarwal, Greenoaks, Lightspeed and Sequoia Capital.
SoftBank has been an investor in OYO for 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.
AdvertisementThe company also claims that its revenues grew 4.4 times in June 2019 as compared to June 2018). It has a million rooms, out of which over 200,000 are in India. OYO now has 20,000 buildings with its signature red and white logo branding on it.
The Indian hospitality unicorn has been spreading its business far and wide. 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 also launched services in Vietnam.
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