India: Global tech corporation Microsoft is in advanced talks to invest strategically in hospitality chain OYO ahead of a proposed IPO for the Indian startup.
It is believed that Microsoft would value OYO at around $9 billion, a valuation which has fluctuated between $10 billion and $3 billion over the last two years, and an agreement to close the deal could be imminent. The proposed investment amount is as yet unclear.
According to some sources, the prospective transaction could involve Oyo shifting to use Microsoft’s cloud services.
In recent weeks, OYO founder and chief executive, Ritesh Agarwal, hinted that his company would consider an initial public offering [IPO] without offering a potential timeline.
This month, OYO secured a $660 million loan from institutional investors through the likes of JP Morgan and Deutsche Bank, claiming that the offer was oversubscribed by 1.7 times. The Softbank-backed chain added that it would use the funding injection to pay off past debts, strengthen its balance sheet and invest in product technology.
The budget hotel aggregator, which also operates a vacation rental brand – OYO Vacation Homes, has expanded aggressively across Southeast Asia in recent years, as well as into Europe and the United States.
However, the pandemic severely hampered OYO’s progress, leading it to lay off or furlough thousands of employees around the world [including at least 90 per cent of its US team] and restructure its business in Japan,…
