DSG invested in OYO at $1.5 Mn valuation and has now exit completely: How much it actually made

Budget hotel brand OYO has been on a fundraising and expansion spree. With operations in more than 10 countries, the Softbank-backed company has picked up over $1.7 billion in funding since its inception.

This gives the best opportunity for early investors to exit from the third highest valued Indian startup. Grabbing the opportunity, early-stage investment firm DSG Consumer Partner has now taken a complete exit from OYO.

It’s indeed a significant development and why not - DSG was an early backer of OYO that has evolved as one of the poster boys of Indian startups with over $5 billion valuation. The exit of Deepak Shahdadpuri-led VC firm isn’t ordinary. It had invested $1,25,000 (about Rs 80 lakh) in OYO in 2014 when it was valued merely $1.5 million (about Rs 9 crore).

It was seed money for OYO in May 2014 wherein Lightspeed led with about $475K fund. These figures are sourced from OYO’s RoC filings in 2015 accessed by Entrackr.

To understand more details of the exit, we have reached out to OYO and Shahdadpuri earlier this week. However, we are yet to get any response from both parties.

Nevertheless, Entrackr tried to decode the exit scenarios for DSG from the SoftBank-backed firm. The early stage investor had put in $1 million (Rs 6.5 crore) total capital across three rounds (uptil B).

Selling its share for the first time in FY16, DSG Consumers Partners had sold 414 Series A CCPS to Softbank. Later, in FY17 it had also sold its 717 Series A1 CCPS to Softbank during FY17. We couldn’t ascertain the value of each share in both above transactions.

It isn’t clear whether 297 Series B CCPS owned by the company were also sold to another investor or owned till the time it made the final exit.

Considering both scenarios separately, at the time of exit in December last year, the VC either had 0.46 per cent stake (including Series B CCPS), or 0.13% stake (excluding Series B CCPS).

In the former case, the company made about $23 million, and in latter about $6.5 million.

Early this week, a Dealstreet Asia’s report mentioned that DSG had 4X return on its investment citing sources. However, Entrackr’s back of the envelope calculation shows that it has made at least 6.5X return on its overall investment.