Hotel chain Oyo is not raising between $300-500 million at a valuation of $2 billion, but the funding amount and valuation seems to have doubled. The SoftBank-backed startup is in talks to raise around $1 billion at a valuation of over $4 billion.
The Gurgaon-based has been in talks with SoftBank Vision Fund, WeWork and a set of US-based strategic investors in the travel space to raise the fund. It has got multiple term-sheets and is expected to finalise the deal by the end of this month. Venture capital investors Sequoia Capital and Lightspeed are also participating in the round in a meaningful way.
If the deal fructifies, Oyo will become the fourth valuable startup in the country after Flipkart ($20 billion), Paytm ($10 billion) and Ola ($4 billion). Oyo was previously valued at about $850 million when it raised about $260 million from SoftBank and other investors in September last year.
According to earlier reports, the hotel chain was also in talks with Chinese Internet company Tencent and was planning to raise between $300 and $500 million at a valuation of over $2 billion.
However, talks with the Chinese Internet giant didn’t go further and the hotel chain has begun talking to others.
Last December, OYO pivoted from aggregation to a pure-play franchise model which allows hotel partners to become Oyo branded hotel. The hotels that were part of the aggregation model converted into franchises.
The move was aimed to deliver uniform experience and pricing. Since then, the platform has also launched back to back operations in various cities outside the country.
In May this year, Oyo entered China in partnership with China Lodging Group. Now, within months of launching operations in China, Oyo’s business is fast emerging in the country.
It has been able to set up a base of over 50,000 rooms, which is almost half the company’s entire inventory in India.
Recently, the company also began operations in London. Entrackr had exclusively reported Oyo’s operations in UK, Dubai, and China. Previously, it also forayed into Malaysia and Nepal.
The development was first reported by ET.
Update: We have updated the headline.