At a time when the hotel industry is trying to recuperate from the losses because of Coronavirus-induced lockdowns, Indian hotel start-up Oyo is all set to make a strong comeback. This is because Microsoft is reportedly in advanced level talks to invest in the hotel start-up valuing it at around USD 9 billion. According to people familiar with the matter, the size of the deal is not clear at the moment. Interestingly, the development comes at a time when Oyo is planning on the public listing. The start-up has the backing of SoftBank. There are reports that after the proposed deal, the hotel start-up may start using cloud services of the tech giant. Oyo and Microsoft have not commented on the reports.
It is pertinent to mention that the start-up recently raised USD 660 million in debt funding. The amount was raised from global institutional investors. It will be used by the company for business investments and pairing dues. Meanwhile, senior executives have said that the company is planning to go public. However, no time frame has been provided for this. A number of other start-ups have lined up for their IPO debut. The start-up was valued at around USD 10 billion two years ago. However, Softbank in recent quarters slashed the valuation of the company to USD 3 billion.
Oyo is currently one of the most valued start-ups in India. It is aggressively expanding to other markets likes Europe, Southeast Asia, and even the United States. But some wrong decisions cast a shadow on its plans of expansion. The situation was worsened by the coronavirus pandemic. The pandemic brought the hotel industry to an almost standstill and forced the companies to lay off employees in order to cover losses. Oyo too had to do the same thing. But with the number of coronavirus cases depleting and vaccination rates rising, the industry is once again hopeful of making a recovery. Easing travels restrictions is also a ray of hope for the industry.
