OYO Raises $7.4 Million Fund to Revive its Business

Ritesh Agarwal owned OYO has raised $7.4 million from Hindustan Media Ventures in a Series F round of funding, said reports citing regulatory filings. The hospitality unicorn, which has been severely hit by the coronavirus pandemic, is back in the funding circle.

However, Agarwal revealed in an interview in October 2020 that he is now spending most of his time with the product, data science, and engineering teams. They are using data to capitalize on segments that have survived the crisis, like upmarket vacation homes. “We are seeing growth in weekend travel, and we are seeing essential travel increase, so we are doubling down there,” he said.

OYO had last raised funding of $2 billion in October 2019, when Agarwal had pumped in money into his own startup raising his own stake to over 30 percent. During the COVID-19 pandemic, Agarwal had said that the company continues to have $1 billion in the bank to continue operations.

However, the valuation of the startup has also crashed from $10 billion to $8 billion. According to a Hurun report released in August 2020, the fall in valuation has been marked in line with the AirBnB valuation markdown to factor the COVID-19 impact on the hospitality business.

Hurun Report India MD and Chief Researcher Anas Rahman Junaid states, “We took into account the post COVID scenario and we have adjusted the valuation of some of the businesses. Hospitality, it’s a no brainer, is one of the highly impacted sectors. AirBnB has downgraded the valuation by 25 percent and we have taken a conservative in-line approach of reducing the valuation in terms of the nearest comparable data.”