Now, as reported by various media outlets, Ritesh Agarwal has spent $2 billion to buy back shares of Oyo from existing investors Lightspeed Venture Partners and Sequoia India. The company put out a statement saying that these investors will still remain backers of the company, without divulging any details.
As per The Wall Street Journal, this round also saw SoftBank increase its stake in the company to own almost half of all Oyo shares. This could be to help Ritesh with his future plans for the company, to get a bigger piece of the success, or perhaps to keep the young entrepreneur from making any rash decisions.
We remain committed to supporting this world-class management team.Mohit Bhatnagar, managing director of Sequoia Capital India Advisors
With this addition of $2 billion worth of shares, Ritesh Agarwal’s stake in Oyo has tripled, from the initial 10 percent to the current 30 percent. He did get support from banks and other financial partners to fund this buyback.
With an evaluation of USD 10 billion, Oyo has become one of India’s most valuable startups. For reference, Flipkart, which was founded 6 years before Oyo in 2007, was acquired by Walmart for $16 billion.
Oyo currently provides hotels and homes in India, China, Sri Lanka, Malaysia, Nepal, Japan, U.K., U.S., U.A.E. and more. It is expanding fast, to say the least as it has entered many new markets within the past few months.
It hasn’t yet announced any plans for Africa or South America. It hasn’t divulged any expansion plans in the U.S. or Mexican markets, however, it does seem like it is present in those markets or looking to grow with a $300 million push into the U.S. market.
“It’s become a valuation game. It’s gotten into a loop of expansion and valuation trying to drive each other. The bigger the valuation the faster you need to expand and vice versa.”Jayanth Kolla, founder of Convergence Catalyst, an Indian tech consultancy
The six-year-old firm aims to become the world’s largest hotel chain by 2023 it as expands further in South East Asia, Europe and the Middle East. With Oyo founder buying back shares with $2 billion, he is consolidating his power in the fast-growing company, which will help him make more decisions to achieve his ambitions for Oyo.