SoftBank, the largest investor in Oyo, has cut the Indian hotel chain’s valuation to $2.7 billion at a time when the startup is months away from going public, a source familiar with the matter said.
An Oyo spokesperson said the startup has improved its finances in recent months, and it believes the speculation about a valuation cut is inaccurate. The markdown makes “no rational basis,” the spokesperson added. SoftBank declined to comment.
Oyo — whose backers include Sequoia India and Lightspeed Venture Partners India (both of which have taken significant exits from the startup), Airbnb and Microsoft — was valued at about $10 billion in a round in 2019. Oyo has raised $3.23 billion in equity (primary + secondary) and debt funding rounds over the years, according to insight platform Tracxn.
SoftBank owns 45% of Oyo, according to the startup. It’s not rare for investors to markup or markdown the valuation of their portfolio startups, though other private investors may not agree with the assessment. Since SoftBank is the largest investor of Oyo and owns nearly half of it, the Japanese firm’s estimation is a strong signal of the startup’s current health.