SoftBank cuts Oyo valuation to $2.7 billion • TechCrunch

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SoftBank, the largest investor in Oyo, has cut its valuation of the Indian hotel chain to $2.7 billion as the startup is months away from going public, a source familiar with the matter said.

An Oyo spokesperson said the startup has improved its financials in recent months and believes the valuation cut speculation is inaccurate. The mark-up does not provide “any rational basis,” the spokesman added. SoftBank declined to comment.

Oyo, which includes Sequoia India and Lightspeed Venture Partners India (both substantially exited the startup), Airbnb and Microsoft, was valued at around $10 billion in 2019.

According to the startup, SoftBank owns 45% of Oyo. It is not uncommon for investors to raise or lower the valuation of their portfolio startups. Since SoftBank is Oyo’s largest investor and owns nearly half of it, the Japanese firm’s valuation is a good sign of the startup’s health.

The startup held a board meeting earlier this month and did not share any updates on its valuation, nor did it acknowledge or comment on SoftBank’s valuation, according to another person familiar with the matter.

“We are confident that the above valuation assumptions are clearly incorrect. Evaluation is the result of business performance. According to our latest audit results, we recorded a first-time EBITDA of Rs 7 crore for the June quarter with a gross profit margin of 41% and a 45% increase in gross hotel bookings per month compared to last financial year,” said the press release. -Secretary of Oyo. the statement said.

“These are dramatically improved results and the high performance trajectory is expected to continue. So, there is no rational basis for the assessment.”

Bloomberg News first reported the downgrade, noting that it had earlier cut the Indian startup’s valuation to $3.4 billion.

The revelation comes at a time when Oyo is months away from going public. Earlier this week, the Indian startup filed for an initial public offering with the local market regulator. The startup originally planned to raise up to $1.16 billion in an IPO at a valuation of up to $12 billion.

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