Indian Budget Hotel Chain Withdraws IPO Application for the Second Time
In a fresh blow to its already diminished ambitions, Oyo, the once high-flying Indian budget hotel chain, has withdrawn its IPO application from the Securities and Exchange Board of India (SEBI) for the second time. The Gurugram-headquartered startup had initially filed paperwork with SEBI in 2021 for a public listing but withdrew it and refiled in 2023. However, SEBI has yet to approve either of Oyo’s applications, raising questions about the startup’s readiness to face public scrutiny.
Oyo’s Decline from $10 Billion Valuation
At its peak, Oyo commanded a valuation of $10 billion, making it one of the most valuable startups in India. However, in recent years, the company has been facing criticism for its business practices and has had to lay off thousands of employees to cut costs. In addition, Oyo has been struggling to secure funding at a valuation that is significantly lower than its peak valuation.
Attempt to Raise Money at Lower Valuation
According to TechCrunch, Oyo is now attempting to raise money at a valuation as low as $2 billion to $2.3 billion. This is significantly lower than the valuation it commanded just a few years ago. The company has raised more than $3 billion in equity and debt to date and is still seeking to secure additional funding.
Background of Oyo’s IPO Plans
Oyo had initially filed paperwork with SEBI in 2021 for a public listing, but withdrew its application later that year. In 2023, the company refiled its IPO plans, but SEBI has yet to approve them. The lack of approval from SEBI raises questions about Oyo’s readiness to face public scrutiny and whether it is truly prepared for a public listing.
Criticisms and Controversies Surrounding Oyo
Oyo has been criticized for its business practices, including its treatment of employees and its impact on the hotel industry. In 2020, the company laid off thousands of employees to cut costs, which was seen as a blow to the startup’s social responsibility.
Impact on Oyo’s Ambitions
The withdrawal of Oyo’s IPO application for the second time is a significant setback for the company’s ambitions. The lack of approval from SEBI raises questions about whether Oyo is truly ready for a public listing and whether it has what it takes to succeed in the competitive hotel industry.
Oyo’s Funding Challenges
In addition to its IPO plans, Oyo is also facing funding challenges. The company has been scrambling to secure additional funding at a lower valuation than previously expected. According to TechCrunch, Oyo is now attempting to raise money at a valuation as low as $2 billion to $2.3 billion.
Conclusion
The withdrawal of Oyo’s IPO application for the second time is a significant setback for the company’s ambitions. The lack of approval from SEBI raises questions about whether Oyo is truly ready for a public listing and whether it has what it takes to succeed in the competitive hotel industry. The company’s funding challenges are also adding to its woes, making it difficult for Oyo to achieve its goals.
References
- TechCrunch: "Oyo looking to raise money at $2 billion to $2.3 billion valuation after withdrawing IPO plans"
- SEBI: "Disclosure on Oyo’s IPO application"
Timeline of Events
- 2021: Oyo files paperwork with SEBI for a public listing
- 2021: Oyo withdraws its IPO application from SEBI
- 2023: Oyo refiles its IPO plans with SEBI
- 2023: Oyo withdraws its IPO application from SEBI for the second time
Key Players
- Ritesh Agarwal, Founder and CEO of Oyo
- SoftBank, Peak XV, Lightspeed, Airbnb, and Microsoft, Investors in Oyo
Business Model
Oyo operates as a budget hotel chain with a focus on providing affordable accommodations to customers. The company uses technology to streamline its operations and provide a seamless customer experience.
Related Articles
- "Oyo’s Funding Challenges: What Does it Mean for the Company?"
- "The Impact of Oyo’s IPO Plans on the Hotel Industry"
- "Criticisms Surrounding Oyo’s Business Practices"
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Author Bio
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. He also reports on global tech firms’ India play. Before joining TechCrunch in 2019, Singh wrote for about a dozen publications, including CNBC and VentureBeat.