Leading hospitality brand OYO is in discussions to raise $200 million in fresh funding as it pushes further into the lucrative US market. The SoftBank-backed company is said to be in talks with both international institutional investors and private Indian backers. Sources indicate OYO is targeting a valuation of $4.5-5 billion for the round.
The new capital injection would support OYO’s inorganic growth strategy in the United States. Just last month, the company made a significant acquisition by purchasing motel and studio hotel operator G6 Hospitality from Blackstone for $525 million. The deal expanded OYO’s US portfolio to include over 320 hotels across 35 states.
In addition to fueling further M&A, the funds may also be applied to expanding OYO’s premium offerings and international operations. The startup has ambitious plans to add another 250 US hotels to its network by 2024 after acquiring nearly 100 properties already this year. Sustaining this breakneck expansion will require sizable financial backing.
Reports note OYO is also seeking to refinance $450 million in existing debt held at higher interest rates. If successful, the refinancing could reduce borrowing costs by up to 4 percentage points. The company is further establishing a $350 million credit facility for interim funding needs.
Founded in 2013, OYO aims to provide affordable and easily bookable accommodations worldwide. After entering the US market in 2019, it has quickly emerged as a major lodging brands owning thousands of locations across major continents. With strong growth underway, OYO appears well-positioned to achieve its goal of going public as early as next year. Securing the additional $200 million could help maintain its upward trajectory in the cutthroat hospitality sector.
