India: Cayman Islands-based RA Hospitality Holdings has announced the signing of a $2 billion primary and secondary management investment round with OYO Hotels & Homes.
The round was confirmed by OYO Hotels & Homes founder and CEO, Ritesh Agarwal and is being supported by global institutional banks and Agarwal’s financial partners, subject to regulatory and shareholder approvals.
OYO, the world’s fastest-growing chain of hotels, homes & living spaces, has undergone significant expansion this year with a recent spate of announcements emerging. It was announced that the company had seen a 4.4x year-on-year growth in revenue in June (compared to last June), with one million rooms under management across hotels and homes and over 200,000 of those rooms located in India alone.
The firm’s strong growth, improved margins, enhancements in customer experience have led to the move, making it one of the first founder and executive-led management purchases in the technology and hospitality sector globally. Lightspeed Venture Partners and Sequoia India, OYO’s early supporters, are selling part of their holdings in order to help the founder increase his stake and therefore commitment while remaining invested significantly in the company’s long-term mission.
Agarwal said in a press release: “As an entrepreneur and on behalf of the company’s management, I am thankful to have been given the opportunity to rededicate ourselves to the company’s mission of building the world’s most loved hospitality brand that is focused on bringing a better lifestyle for the common man.
“It is a very exciting time for OYO right now as we make great living spaces come alive across all corners of the world from Texas to Tokyo. Our endeavour continues to be to become the most loved hospitality brand in the coming years.
“I am deeply humbled and delighted to have gotten the support of all our investors, the board and above all the institutionalised financial partners that have provided the necessary financial support towards realising this vision. Needless to say, the deal remains subject to shareholder and regulatory approvals,” he added.
OYO Hotels is continuing to brings its model of combining design, hospitality, technological expertise, financial acumen and operational capabilities to real estate owners around the world. This gives them the ability to get a higher return on investments, access easy financing opportunities, transform their hotels and offer good quality customer service, thereby increasing occupancy and profitability in every OYO building.
In total, there are over 20,000 such buildings worldwide.
OYO says it started with the belief that everyone deserves a ‘beautifully designed, chic and comfortable living space’ and that everyone deserves a better life. The company has committed to changing the way people live by upgrading unbranded hotels into high-quality living spaces and offering them at affordable prices in desirable global locations.
OYO Hotels has also attracted some of the world’s leading investors, including Airbnb, SoftBank Vision Fund, Lightspeed Venture Partners, Greenoaks Capital, Sequoia India and Hero Enterprise.
The capital raised through forthcoming primary round will help boost OYO’s expansion plan in India, US, China, UK, EU and SEA markets. The firm is increasingly evolving into a real estate service platform with one million-plus room under its management globally.
SoftBank Vision Fund managing partner Munish Varma said: “We have confidence in Ritesh’s vision for OYO and how the team has come together to build a truly global brand from India. It has been an exciting journey so far and we hope to achieve many more milestones together in the time to come.”
Lightspeed India Partners Advisors partner Bejul Somaia said: ‘’As the company’s first institutional investor, Lightspeed is fortunate to have been part of OYO’s journey from a fledgling startup in India to a transformative company in the hospitality industry globally. We remain committed to supporting Ritesh and the OYO team as the company embarks on its next phase of growth globally.”
Sequoia Capital India Advisors managing director Mohit Bhatnagar said: ‘It’s been five years since Sequoia India first partnered with Ritesh and his team. Today our footprint stands at one million rooms across India, China, SE Asia, Europe and now the US.
“This is the kind of stuff startups and ventures investing dreams are made of. Make no mistake…OYO has been built on the back of an audacious & ambitious founder’s vision, and unrelenting hard work and sacrifices by thousands of OYOpreneurs across the globe.
“They are the true architects of this disruptive company. We remain committed to supporting this world-class management team as they continue to create living spaces across the world,” he added.
For more information, visit the OYO Hotels & Homes website here.