Oyo’s investors Sequoia Capital and Lightspeed Venture Partners have collectively earned between $400 million and $500 million (₹2,800 crores and ₹3,500 crores) during the buyback transactions of 15% stake in the firm. Oyo’s founder Ritesh Agarwal has bought back the shares in Oyo in November this year.
During the transaction, Oyo’s Cayman Island-based subsidiary RA Hospitality bought the 15% shares in the name of its founder Ritesh using loans from Japan-based banks Nomura and Mizuho.
Lightspeed Venture Partners earned a profit of $200 million in the $850 million deal and Sequoia Capital earned $150 million on the $450 million transactions, according to a report by Economic Times. Lightspeed Held a 13.4% stake in the firm and Sequoia held a 10.24% stake. Lightspeed invested $28 million in Oyo whereas Sequoia has invested $25 million.
With the transaction, Ritesh now owns around 30% shares of the company and Softbank around 50%. The transaction has also doubled Oyo’s valuation from $5 billion to $10 billion.
This transaction is being considered the second-biggest exit in India after Walmart bought 81.3% shares in Flipkart for $16 billion in 2018.
Founded by Ritesh in 2013, Oyo began its journey as a simple hotel aggregator and slowly began to gain traction. The company earned its major customers after it introduced the “couple-friendly” rooms in 2016 to allow unmarried couples to book rooms without any inconveniences.
The startup has transformed itself into a franchise model and has forayed into new areas like coworking, cloud kitchens and more. It has raised around $1.7 billion in funding from investors like SoftBank Vision Fund, Airbnb, Sequoia Capital, Hero Enterprise and Greenoak Capital.