The founder of India’s biggest hotel chain is pumping $2 billion into his own company, upping his stake in the business and making it India’s second-most valuable startup.
Ritesh Agarwal will invest $700 million into OYO as part of the company’s new $1.5 billion fundraising round, with existing investors including Japan’s SoftBank (SFTBF) putting in the rest, OYO said in a statement Monday. He’s also buying $1.3 billion worth of existing shares from early investors Lightspeed Venture Partners and Sequoia Capital, with support from “banks and financial partners,” a spokesperson said.
Agarwal, 25, founded OYO in 2013, taking over the operations of budget hotels across India and rebranding and renovating them for a fee or revenue share. The company quickly became the dominant player in India’s hospitality industry and has now set its sights on an ambitious global expansion.
The latest investment takes Agarwal’s stake to 30% and values OYO at $10 billion, according to a person familiar with the matter. That makes it India’s second-largest startup after digital payments company Paytm, which also counts SoftBank as one of its biggest investors and is currently valued at around $15 billion.
“We truly believe that we will be able to build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability,” Agarwal said in a statement.
OYO confirmed that the founder’s stake in the company has increased, but declined to comment on the size of it. The company also declined to comment on its latest valuation.
OYO will use most of its new investment to further its expansion into Europe, where it bought vacation rental company @Leisure earlier this year, and the United States, where it has signed on Airbnb as an investor and recently bought the Hooters Casino Hotel in Las Vegas.
It currently operates in 800 cities across 80 countries, including the United States, United Kingdom, China and Japan.