The investment comes a little over a month after the company stated that its founder and group chief executive Agarwal would invest $700 million into the company he founded in 2013, with the rest coming in from SoftBank and other unnamed investors.
A significant portion of the funding raised by Oyo is likely to go towards growing its business in the US. In June, ET reported that the company had committed to investing $300 million over the next few years in the world’s largest consumer market.
NEW DELHI: The board of Oravel Stays, which owns and operates Oyo Hotels & Homes, has cleared a $1.5 billion primary capital infusion into the company by its largest institutional stakeholder, Soft-Bank Vision Fund, and founder Ritesh Agarwal’s RA Hospitality.
In a special resolution passed at an extraordinary general meeting of shareholders, SVF India Holdings, a Cayman Islands registered entity, has been issued 15,325 Series F compulsorily convertible preference shares at $52,643.22 each, according to a note by business Intelligence platform paper.vc. RA Hospitality, a special purpose vehicle also domiciled in the Cayman Islands, has been issued 13,169 equity shares, at the same price.
The investment comes a little over a month after the company stated that its founder and group chief executive Agarwal would invest $700 million into the company he founded in 2013, with the rest coming in from SoftBank and other unnamed investors. Post the closure of the transaction, Agarwal will hold 18.03% of the company, up from his pre-investment ownership of 9.43%. Last month, ET had reported that Agarwal’s investment was being financed by a $2-2.2 billion debt he had raised from a consortium of Japanese financial institutions, including Nomura Holdings and Mizuho.
This debt financing involved the 26-year-old group CEO pledging his stake in the company. A substantial portion of the fund was expected to be used to partially buy out the stakes held by two early investors in Oyo — venture capital firms Lightspeed Venture Partners and Sequoia Capital.
The multi-layered transaction has set a new valuation benchmark —$10 billion— for the six-year-old company.
A significant portion of the funding raised by Oyo is likely to go towards growing its business in the US. In June, ET reported that the company had committed to investing $300 million over the next few years in the world’s largest consumer market.
Additionally, Oravel Stays has also set up two joint ventures in India, with an entity — SB Topaz — controlled by SoftBank. Of the two JV entities — Mountainia Developers and Hospitality and MyPreferred Transformation and Hospitality — the former has been set up to acquire hotels-related real estate assets, ranging from land parcels to fullydeveloped properties.
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