The founder of Indian hotel company OYO Hotels & Homes has signed a US$2 billion management investment round that will see him buy shares back from current investors.
Ritesh Agarwal, through RA Hospitality Holdings (Cayman), will buy the shares from Lightspeed Venture Partners and Sequoia India, both early supporters of the hotel company, which now has more than 1 million rooms under management.
Agarwal founded the company at the age of 18 and became the first resident Asian to be accepted to the Thiel Fellowship started by PayPal founder Peter Thiel.
OYO has seen a 4.4-times year-over-year growth in June 2019, along with improved margins and a focus on customer experience.
Jeremy Sanders, head of OYO Hotels & Homes UK, told BBT last month that the company has big plans for growing its footprint in the British market after establishing a London office in 2018.
Commenting on the management buyback, Agarwal said: “As an entrepreneur and on behalf of the company’s management, I am thankful to have been given the opportunity to rededicate ourselves to the company’s mission of building the world’s most loved hospitality brand that it focused on bringing a better lifestyle for the common man. It is a very exciting time for OYO right now as we make great living spaces come alive across all corners of the world, from Texas to Tokyo.
“I am deeply humbled and delighted to have gotten the support of all our investors, the board and above all the institutionalised financial partners that have provided the necessary financial support towards realising this vision. Needless to say, the deal remains subject to shareholder and regulatory approvals.”
Bejul Somaia, partner at Lightspeed India Partners Advisors, commented: “As the company’s first institutional investor, Lightspeed is fortunate to have been part of OYO’s journey from a fledgling start-up in India to a transformative company in the hospitality industry globally. We remain committed to supporting Ritesh and the OYO team as the company embarks on its next phase of growth globally.”
Mohit Bhatnagar, MD of Sequoia Capital India Advisors, added: “It’s been five years since Sequoia India first partnered with Ritesh and his team. Today, our footprint stands at 1 million rooms across India, China, South-East Asia, Europe and now the US. This is the kind of stuff start-ups’ and ventures’ investing dreams are made of. But make no mistake; OYO has been built on the back of an audacious and ambitious founder’s vision, and unrelenting hard work and sacrifices by thousands of OYOpreneurs across the globe. They are the true architects of this disruptive company. We remain committed to supporting this world-class management team as they continue to create living spaces across the world.”