Indian hospitality chain Oyo Hotels & Homes (OYO) has received its board approval to raise $1.5 billion in primary capital infusion from its largest investor, SoftBank Vision Fund, and RA Hospitality.
According to the company’s filing with the Registrar of Companies (RoC) sourced by paper.vc, it has issued 15,325 Series F compulsorily convertible cumulative preference shares (CCCPS) to SVF India Holdings Cayman Islands-registered entities at a price of $52,643.22 a share. On the other hand, RA Hospitality has been issued 13,169 equity shares at the same price.
The round is expected to value OYO at about $10 billion.
The development comes a month after the company stated that its founder, Ritesh Agarwal, would invest $700 million in the Series F financing by subscribing to new shares of the company. It had also said that SoftBank, along with a few investors, would also inject money into the round.
Agarwal has raised debt of $2-2.2 billion from a consortium of Japanese financial institutions, including Nomura Holdings and Mizuho, to fund his investment. A part of the debt will also be used to buy out stakes of two of the early investors in OYO, including Lightspeed Venture Partners and Sequoia Capital.
Post the closure of the transaction, Agarwal will hold 18.03 per cent stake in the company, up from his pre-investment holding of 9.43 per cent, The Economic Times reported on Monday.
The hospitality company commanded a valuation of $5 billion in its Series E funding round, in which it raised about $1.2 billion. Hero Enterprise and China Lodging Group are the other investors in OYO.
Founded by Agarwal in 2013, OYO is India’s second-most valuable startup. Its service covers 1.2 million rooms in over 80 countries, including 590,000 rooms in China. It entered the U.S. earlier this year and now has 7,500 rooms in 60 cities. The company also recently announced an investment of $300 million to expand its footprint in the U.S.
In August, OYO said it will invest €300 million (about $334 million) to strengthen its vacation rental business in Europe, given the increasing preference for vacation homes by customers around the world.