Ritesh will buy back a part of the stake held by OYO’s early investors Lightspeed Venture Partners and Sequoia India’s as well as infuse more capital into the company.

OYO founder Ritesh Agarwal to invest 2 billion to increase his stake in the company
Atom Fund Raising Friday, July 19, 2019 - 15:52

OYO Hotels and Homes founder and CEO (Group), Ritesh Agarwal will be investing $2 billion into the company and will be buying back shares from OYO’s early investors Lightspeed Venture Partners, and Sequoia India, who are selling part of their holdings. Ritesh will be increasing his stake in the company through RA Hospitality Holdings (Cayman), having signed a $2 billion primary and secondary management investment round, supported by global institutional banks and his financial partners, subject to regulatory and shareholder approvals.

According to reports, Ritesh’s stake will now increase nearly threefold from around 10% to 30%.  Both Sequoia Capital and Lightspeed Venture Partners stand to make over $500 million each from this deal.

“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… 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 institutionalized financial partners that have provided the necessary financial support towards realizing this vision. Needless to say, the deal remains subject to shareholder and regulatory approvals,” Ritesh said in a statement.

OYO claims that this is one of the first founder and executive-led management purchases in the technology and hospitality sector, globally.

This year, OYO has seen a 4.4x YOY growth in revenue in June 2019 (versus June 2018), with 1 million rooms under management across hotels and homes; with over 200,000 rooms in India.

OYO counts several investors from across the globe including Airbnb, SoftBank Vision Fund, Lightspeed Venture Partners, Greenoaks Capital, Sequoia India, and Hero Enterprise.

The capital received through the forthcoming primary round will help boost OYO’s expansion plan in India, US, China, UK, EU, and SEA markets.

’As the company’s first institutional investor, Lightspeed is fortunate to have been part of OYO’s journey from a fledgling start-up 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,” Bejul Somaia, Partner, Lightspeed India Partners Advisors said.

Sequoia, which first invested in OYO five years ago said, “Today our footprint stands at 1 million rooms across India, China, SE Asia, Europe and now the US. This is the kind of stuff start-ups and ventures investing dreams are made of. But make no mistake…OYO has been built on the back of an audacious and 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.”

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