Noesis Capital Advisors, a Mumbai-based hospitality advisory firm, has filed a winding-up petition against Oravel Stays, the owner of OYO Rooms, a Gurgaon-based budget hotel aggregator. As claimed by the firm, OYO Rooms has failed to pay back an amount of INR 1.5 Crore, despite of using their services during the scaling-up phase of the venture.
The petition, filed on April 26 this year, allows recovery of dues by forcing an insolvent company into compulsory liquidation. OYO, denied commenting on the report.
“OYO availed services of Noesis through an exclusive and noncompete contract. Mid-way through the term of the agreement, we found evidence that Noesis was in breach of agreement and terminated their services. We also sent them a legal notice to recover dues paid in good faith. That matter is presently sub-judice,” said an OYO spokesperson to ET.
OYO is continuously getting troubles this year. First, it faced the legal battle from rival ZO Rooms, who was blamed of copying OYO’s confidential data. While its talks for raising further $400 Mn still remain dangled amidst valuation slash down, it is also facing competition from new portals in this space like Zip Rooms.
OYO Rooms was launched in 2012 by Ritesh Agarwal, is now growing at a 15X YoY growth rate. It is backed by investors such as Softbank, Sequoia Capital, Lightspeed Venture Partners, Greenoaks Capital, DSG Consumer Partners, and Venture Nursery. The company recently raised its fifth round of funding pumping in another $100 Mn.
It is currently operating in more than 170 Indian cities with over 5,500 hotel partners. The company has recently launched operations in Malaysia. Also, it has now started taking hotels on lease to improve the consumer experience and have a better repeat rate.