OYO Co-Founder and Chief Executive Offiver, Ritesh Agarwal, is raising his stake in his own company, backed by Softbank, in a $2 billion investment deal.
The financing is an unusual move for a founder, and see the 25-year-old executive boosting his stake by buying shares from Oyo's existing backers Sequoia and Lightspeed. The two investors will remain shareholders and committed to the company.
A spokesperson told Business Insider that Agarwal is financing the deal via support from "global institutionalized banks and his financial partners," without giving specific details.
Along with the buyback, Agarwal and Oyo's backers will inject $1.5 billion of fresh capital into the business, with $700 million of that coming from Agarwal. The new funding values the firm at $10 billion.
Oyo is a fast-growing platform for budget hotels and operates on a franchise basis. The company turns failing local hotels into Oyo franchises, provides some capital to redecorate and ensure there's functioning WiFi, then sells those rooms through its booking platform. The promise to hotel owners is a boost in occupancy rates and revenue.
The company has expanded to more than 80 countries, including China. It has more than 500,000 rooms on its platform, and says it's seen a 3.8 times increase in revenue growth year-on-year. It employs some 20,000 staff.
The firm has raised more than $2 billion in total, giving it a massive war chest to fund its expansion.
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