Lightspeed, Sequoia make over 20X return for 15% share sale in OYO

It is very rare that a venture capital investment reaps a multifold return for its investment in a startup. And this as most startups either get lost in their early-stage or fail to achieve the desired scale in the face of stiff competition and funding crunch.

But in this frenzy, few bets do succeed, which gets a VC a handsome return on its investment (RoI) in a couple of years. Tiger Global’s exit from Flipkart is a prime example where it made three times of its investment in Flipkart.

And in some cases, returns could be manifold – over 10X or 20X.

Lightspeed Venture Partners’ and Sequoia Capital India’s partial exit from OYO is case in point. Both the VCs have completed the secondary transaction selling 15% stake in OYO Hotels & Homes to founder Ritesh Agarwal for $1.5 billion.

Lightspeed, which according to an ET report put in $28 million in OYO, is making over 35X returns whereas Sequoia, which made $25 million, will garner over a 20X return on its investment.

Post the transaction, both the VCs will continue to hold 4-5% stake in OYO.

OYO’s founder and CEO Ritesh Agarwal confirmed the development though the company did not share any details of the transactions.

In September, Agarwal’s $1.5 billion stock buyback plan had got a green signal from the Competition Commission of India (CCI).

The transaction, through freshly formed Cayman-based RA Hospitality Holdings, would take the valuation of OYO to $10 billion and Agarwal’s current 9% stake would increase to over 30%. SoftBank will have close to 50% stake in the hotel chain.

Three Japan-based banks – Nomura, Mizuho, and one unidentified bank, are funding Ritesh Agarwal’s $2 billion loans.

The repayment is expected in three years when OYO plans to hit IPO. The hotel chain expects its valuation to go up to $18 billion by then. This would take Agarwal’s stake to $4.8 billion, through which he plans to repay the loan with interest.

Lightspeed, Sequoia make over 20X return for 15% share sale in OYO

Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

Below is the bank details:

 
Amount: INR 3,00,000 + GST (TDS to be deducted 2%)
Bank Name: ICICI Bank
Account Type: Current
Account Name: Bareback Media Private Limited
Account Number: 002105023595
IFSC Code: ICIC0000021
 
Kindly make the payment to confirm your seat for Unicorn trip 2.1. For any other queries/concern: pls drop a email on: [email protected] or [email protected]
X