Indian hospitality startup Oyo, backed by Japanese conglomerate SoftBank Group, announced on Monday a $1.5 billion (roughly Rs. 10,600 crores) deal with its existing investors that will tighten the founder's control and provide fresh capital to the money-losing firm.
Oyo founder Ritesh Agarwal will put in $700 million (roughly Rs. 5,000 crores) into the company as a primary investment, an Oyo spokeswoman said, adding the money was part of the $2 billion (roughly Rs. 14,200 crores) debt he raised in July.
The rest of the money, most of which will be used to expand the company's businesses in the United States and Europe, will come from other existing investors, Oyo said.
Other than SoftBank, Oyo also counts Lightspeed Ventures and Sequoia Capital among its investors.
Oyo, which operates in over 80 countries, is expanding in the United States and Europe, where it runs vacation rentals. In the United States, Oyo is rebranding the Hooters Casino Hotel in Las Vegas as its own.
Agarwal has said India and China account for two-thirds of the company's total revenue, while a fifth comes from Europe and the United States.
Meanwhile, as the company pushes for profits, many hotel owners who partnered with it complained of their income being hurt by higher fees Oyo charges them.
© Thomson Reuters 2019