Hospitality startup Oyo, backed by SoftBank, is reportedly seeking to raise $80-90 million from family offices, as per a report by The Arc. Collaborating with InCred, a financial services firm, Oyo aims to secure this investment, with commitments starting at $2 million from each family office.
Family offices, renowned for their tailored financial and investment management services for ultra-high-net-worth individuals (HNWIs), stand out in the realm of private wealth management. Oyo’s decision to engage family offices underscores its strategic approach to accessing growth capital from the private wealth sector.
A conference arranged by InCred facilitated discussions between Oyo’s CEO and founder, Ritesh Agarwal, and nearly 100 potential investors. The capital raised is primarily earmarked for expanding Oyo’s business footprint, with a portion allocated to debt reduction.
Furthermore, Oyo seeks to secure half of its targeted $150 million from a sovereign fund, although specific details are undisclosed. Earlier reports indicated discussions with Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, to spearhead a $400 million fundraising round for Oyo.
The fundraising endeavors are underpinned by a valuation of $2.3 billion, marking a notable decline from Oyo’s peak valuation of $10 billion in 2019. SoftBank had previously adjusted Oyo’s valuation to $2.7 billion in 2022. Despite these adjustments, Oyo maintains an optimistic outlook, highlighting its focus on refinancing outstanding debt to bolster profitability.
While Oyo has shelved its initial public offering (IPO) plans, it anticipates refiling once its refinancing strategy materializes. The company intends to raise up to $450 million through dollar bond issuance, a move poised to fortify its financial standing.