Hospitality giant OYO’s valuation has reportedly crossed the $9 Bn mark as a result of the company’s INR 54 Cr fundraise from Hindustan Media Ventures Ltd, as part of the company’s Series F1 funding round.
The funding round was reported in January this year. The growth in valuation comes after it dropped to $8 Bn last year from $10 Bn in November 2019.
The Gurugram-headquartered company said it planned to utilise the capital in strengthening its technology stack for delivering an improved partner and customer experience.
According to Crunchbase, to date, the company has raised $3.2 Bn in 17 funding rounds from 23 investors. Its investors include SoftBank Vision Fund, Sequoia Capital, Lightspeed Ventures, Airbnb, and Hero Enterprise, amongst others.
However, in another cost restructuring exercise, earlier this month, OYO offloaded 150 employees from its ancillary unit finance shared services to research and consultancy firm KPMG.
“OYO’s core expertise lies in being a technology and revenue growth brand for owners and operators of small hotels and homes. OYO’s financial shared services teams primarily worked on transaction processing covering payables and receivables management, travel and expenses, and other related routine financial operations. And we believe these are best run by companies that have proven expertise and experience to do so,” an OYO spokesperson told Moneycontrol.
All through last year, OYO either laid off or furloughed several of its employees to tide through the tough period. In September last year, OYO increased the furlough period for its employees by another six months, till February 2021. The company also provided a Voluntary Separation Program (VSP), through which employees would be provided with financial assistance, relaxation on ESOP vesting, health insurance coverage, career transition support amongst other things.
OYO lead investor Softbank Vision Fund CEO Rajeev Misra said last year that the company had reduced its monthly burn by 70% from $100 Mn pre-Covid to $30 Mn per month. He had said that the company was clocking nearly $25-30 Mn per month in revenue and had achieved break-even.
In January, OYO claimed that it had $1 Bn in cash and cash equivalent to navigate the post-pandemic market.
At one time, Oyo said it had 1.2 Mn rooms available in 80 countries such as the US, UK, China, Japan and Indonesia. However, this month, the Financial Times reported that due to growing losses, the company was scaling back its international expansion plans as it pulls out of the U.S. and European markets and severs its Latin American partnership.