Lightspeed, Sequoia rake in $400-500m profit from OYO share sale

Visual from OYO website

At a time when exits remain a rare phenomenon in the startup space, Lightspeed Venture Partners and Sequoia Capital have collectively mopped up profits worth $400-500 million from partial sale of their shares in Oyo Hotels & Homes (OYO) to its founder Ritesh Agarwal.

RA Hospitality, a special purpose vehicle domiciled in the Cayman Islands, recently bought shares worth $1.3 billion in OYO from these two investors on behalf of Agarwal. Japanese financial institutions, including Nomura Holdings and Mizuho, had extended a debt of about $2-2.2 billion to Agarwal to fund the purchase.

Lightspeed Venture Partners, which held about 13% stake in OYO, partially sold its stake for roughly $850 million while Sequoia Capital raked in $450 million, overall. The Silicon Valley venture capital, which has infused about $27 million into the company so far across different funding rounds, held a 10.24 per cent stake in OYO.

According to a report in The Economic Times, Lightspeed made a profit of about $250 million from the sale while executives at Sequoia have taken home around $150 million.

Agarwal made headlines in July with plans to spend $2 billion to raise his stake in the company to 30% from about 10%. SoftBank is currently the largest shareholder in OYO with about a 48 per cent stake.

Last month, OYO had also received its board approval to raise $1.5 billion in primary capital infusion from SoftBank Vision Fund and RA Hospitality. Agarwal will invest about $700 million in the Series F financing, while existing investors SoftBank Vision Fund, Lightspeed, and Sequoia India will contribute the rest.

Founded by Agarwal in 2013, OYO is India’s most valuable startup after One97 Communications, the parent of digital payments pioneer Paytm. Its service covers over 1.2 million rooms in over 80 countries. It counts India and China among its largest markets. The company also recently announced an investment of $300 million to expand its footprint in the U.S.

One of the other big exits in the startups space was that of Tiger Global from Flipkart. The New York investment firm Tiger Global realized $3 billion when American retail giant Walmart bought a majority stake in Flipkart last year.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.