OYO Raises INR 550 Cr From Ritesh Agarwal Led Redsprig Innovation

SUMMARY

OYO has raised INR 550 Cr (about $65 Mn) from its founder Ritesh Agarwal’s Redsprig Innovation Partners

In November last year, Inc42 reported that Agarwal was looking to increase his stake in the company

OYO plans to utilise the funds to drive growth, support global expansion initiatives (including acquisitions), enhance its business strategies etc

Hospitality giant OYO has raised INR 550 Cr (about $65 Mn) from its founder Ritesh Agarwal’s Redsprig Innovation Partners.

Redsprig Innovation is a venture capital firm headed by Agarwal. In November last year, Inc42 reported that Agarwal was looking to increase his stake in the company with a fund infusion of INR 550 Cr.

OYO issued 12.91 Cr equity shares at an issue price of INR 42.6 each for the fundraise, as per its filings with the corporate affairs ministry.

OYO plans to utilise the funds to drive growth, support global expansion initiatives (including acquisitions), enhance its business strategies, and undertake other corporate activities. The new equity issuance will result in a 1.728% dilution of the company’s total stake.

Last month, Nuvama Wealth & Investment Limited (formerly Edelweiss Securities) acquired OYO shares worth INR 100 Cr on behalf of a consortium of family offices. At the time, a source told Inc42, “The company’s recent profitability has sparked significant interest in the market, which has further caught the attention of many potential buyers.”

Recently, global rating agency Moody’s upgraded the corporate family rating of OYO to “B2” from “B3” previously.

Founded in 2012 by Ritesh Agarwal, OYO is a hospitality startup and claims to offer over 40 integrated products and solutions to patrons who operate more than 157K hotels and home storefronts in more than 35 countries, including India, Europe, and Southeast Asia.

The latest funding round marks the second significant capital infusion by Agarwal in the company. In August last year, Agarwal’s Singapore-based fund, Patient Capital, led OYO’S $175 Mn funding round.

On the financial front, OYO turned profitable in the financial year 2023-24 (FY24). It posted a net profit of INR 229.5 Cr during the year as against a net loss of INR 1,286.5 Cr in the previous financial year. However, its operating revenue remained almost flat during the year under review.

Revenue from operations stood at INR 5,388.7 Cr in FY24, a decline of 1.3% from INR 5,463.9 Cr in the previous fiscal year.

The company also maintained its profitability in the first two quarters of the ongoing financial year. It reported a profit of INR 158 Cr in Q2 FY25 and INR 132 Cr in Q1 FY25.