OYO Can Make A Big Announcement That Can Skyrocket Its Valuation

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OYO, the Indian startup unicorn from the hospitality industry, can make a major announcement in the next few days. Despite being hit badly due to the pandemic and grim possibility in near future, it’s inches away from clinching a deal with the world’s largest software giant. Yes, we are talking about none other than Microsoft!

According to the sources of TechCrunch, Microsoft is evaluating OYO for the next investment. The talk is in its final leg and both the companies could announce the deal in the next few days.

OYO, which was valued whopping $9 billion once, has witnessed its valuation tanked to $3 billion in recent time. The mass layoffs and increasing losses have forced the startup unicorn to take a conservative approach until the situation turns back to the pre-covid level.

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Microsoft Invest In OYO: Big Picture

  • It’s not yet clear how much money Microsoft would be investing in OYO, but the deal will soar the valuation of OYO to $9 billion, or even higher.
  • if the deal is materialised, OYO would shift its tech infrastructure to Microsoft’s Azure.
  • The pandemic hit OYO was valued at only $3 billion in the recent quarters by none other than its lead investor Softbank.
  • OYO raised $660 million in debt funding from global institutional investors to stay cash flow positive and invest in the business opportunities.
  • So far OYO has raised $4.1 billion in 18 rounds from 26 investors.
  • Like many other Indian startup unicorns, OYO is also exploring the possibility of IPO, but the company has not decided on any fixed timeframe for it.
  • With the increasing vaccination rate, OYO is expecting to reach the business back to the pre-covid level soon. Few big claims made by CEO Ritesh Agarwal turned many heads.
  • In Europe, the number of daily bookings on OYO has doubled as the vaccination rate is relatively high.
  • Microsoft’s investment in OYO will provide the Indian startup unicorn with a bigger runway in this tough time. It will also help OYO to restrategize and resume its marketing activities that were cut down due to financial stress.

Food For Thought

OYO is not the only startup struggling in the pandemic-hit era. Many other startups that are in the retail or travel or hospitality industry are facing equally tough times to attract any new investment to stay afloat. In such a situation Microsoft investment in OYO is no less than a lifeline that can turn the table back in the favour of OYO.

On the flip side, the world is staring at the third wave as the numbers of active cases of Covid have started increasing again. In such a scenario OYO may need a very big runway and a huge injection of funds to survive. A lot depends on how big of a check Microsoft is going to write for Oyo!

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