New Delhi: Satya Nadella-headed Microsoft has invested USD 5 million in Airbnb-backed Indian budget hotel chain OYO taking its valuation to USD 9 billion, as the hospitality chain plans a potential initial public offering (IPO) soon, as per IANS report.
Microsoft OYO Deal
- According to a regulatory filing by OYO this week, Microsoft Corporation has invested USD 5 million (nearly Rs 37 crore) in the company via the issuance of equity shares and compulsory convertible cumulative preference shares (CCCPS), IANS reported.
- OYO was valued at just USD 3 billion in recent quarters by SoftBank, one of its largest investors, IANS reported.
- Reliable sources had told IANS last month that a deal may close soon once the due regulatory processes are met. The size of the deal could not be ascertained at that time, as per IANS report.
- The Ritesh Agarwal-run hospitality chain has Airbnb, Chinese ride-hailing giant Didi Chuxing and ride-hailing firm Grab as strategic investors, the IANS report says.
- Founder and CEO Agarwal said in July that the company would consider a potential IPO soon, the IANS report says.
- The news about the Microsoft-OYO deal surfaced after OYO announced earlier this month that it has raised USD 660 million from global institutional investors as TLB (Term Loan B), as per IANS report says.
- A company statement had said that the offer was oversubscribed by 1.7 times and the company received commitments of close to USD 1 billion from leading institutional investors, IANS reported.
- The company said it will utilise these funds to retire its past debts, strengthen the balance sheet and other business purposes including investment in product technology, it said.
- OYO is the first Indian startup to be publicly rated by Moody’s and Fitch, two of the leading international rating agencies.
- The Microsoft deal “may also involve OYO shifting to use its cloud services”, a TechCrunch report mentioned.
- OYO has aggressively been expanding its operations to several markets including Southeast Asia, Europe, and the US in recent years.
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