Despite a rocky year due to COVID-related travel restrictions, Oyo Hotels and Rooms is preparing to file for an initial public offering (IPO) to raise roughly $1 billion.
The Indian hospitality startup is expected to file for the IPO next week in Mumbai, with an offering that could be between $1 billion and $1.2 billion, Reuters reported Thursday (Sept. 23), citing a source. The offering will consist of fresh issue of shares and an offer for sale from current shareholders, the source said. Oyo, which is backed by SoftBank, did not immediately respond to requests for comment, Reuters reported.
The news outlet noted this listing follows other high-profile debuts, including food delivery firm Zomato Ltd, Berkshire Hathaway-backed Paytm and private equity firm TPG-backed Nykaa. Another SoftBank-backed venture, ride-hailing company Ola, is also set to go public.
Read more: Oyo Hotels Cuts Staff In Latin America, Pivots To Other Markets
Oyo’s business model is turnkey — in return for room prices and bookings, independent hotel owners get a portion of the revenue and fees that are collected, as long as they agree to rebrand as an Oyo hotel.
The company’s business model thrived at first but hit a snag due to COVID-19 travel restrictions in 2020. Last September, SoftBank — which owns a 46 percent stake in Oyo — stepped in and laid off staff, while also taking back $75 million that had been meant for Oyo’s growth in Latin America. Oyo downsized its operations in Japan around the same time.
In February of this year, Oyo announced it would lay off nearly all of its staff in Latin America and reduce funding as it shifted to a digital-only model in that region.
Oyo said at the time it was pivoting to areas that show the promise of growth, such as India, Southeast Asia and Europe.
According to Reuters, Oyo Founder and Chief Executive Ritesh Agarwal had said in July the company was likely to return to levels it reached prior to the second wave of COVID-19 infections in India and “grow from there.”