Oyo, the Indian budget hotel chain and once India’s second-most valuable startup at $10 billion, has experienced a significant decline in its valuation. In a recent Series G funding round, the company raised $173.5 million, resulting in a new valuation of $2.4 billion. This is a significant drop from its peak valuation and falls below the total capital raised by the company.
The funding round was led by Patient Capital, which is run by Oyo’s founder and CEO, Ritesh Agarwal. Other contributors included InCred Wealth, a capital pooling firm, and J&A Partners. Although the exact reasons behind Oyo’s declining valuation are not clear, the company has been facing a series of controversies in recent times.
Despite reports in May indicating that Oyo was seeking a funding round that could potentially lower its valuation to $3 billion or lower, the company denied any rumors at that time. Oyo’s spokesperson stated that there were no concrete transactions or valuation discussions taking place. However, the recent funding round suggests otherwise.
Oyo’s founder, Ritesh Agarwal, had previously invested $1.5 billion into the company at a $10 billion valuation. The decline in valuation raises questions about the future prospects of the once-promising startup, as it navigates through challenging times and strives to regain investor confidence.