BIG DEVELOPMENT! Microsoft to invest in OYO before its potential IPO
BIG DEVELOPMENT! Microsoft to invest in OYO before its potential IPO
Satya Nadella-run Microsoft is in advanced talks to invest in Airbnb-backed Indian budget hotel chain OYO at a valuation of $9 billion, as the hospitality chain is planning a potential initial public offering (IPO) soon, sources said on Friday.
Reliable sources told IANS that a deal may close soon once the due regulatory processes are met. The size of the deal could not be ascertained.
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There was no official confirmation from either Microsoft or OYO as of now.
The Ritesh Agarwal-run hospitality chain has Airbnb, Chinese ride-hailing giant Didi Chuxing and ride-hailing firm Grab as strategic investors.
Founder and CEO Agarwal said earlier this month that the company would consider a potential IPO soon.
The news about the Microsoft-OYO deal surfaced after OYO announced earlier this month that it has raised $660 million from global institutional investors as TLB (Term Loan B).
A company statement had said that the offer was oversubscribed by 1.7 times and the company received commitments of close to $1 billion from leading institutional investors.
"We are delighted by the response to OYO's maiden TLB capital raise that was oversubscribed by leading global institutional investors. We are thankful for the trust that they have placed in OYO's mission of creating value for owners and operators of hotels and homes across the globe," said Abhishek Gupta, Group Chief Financial Officer, OYO.
The company said it will utilise these funds to retire its past debts, strengthen the balance sheet and other business purposes including investment in product technology, it said.
OYO is the first Indian startup to be publicly rated by Moody's and Fitch, two of the leading international rating agencies.
The Microsoft deal "may also involve OYO shifting to use its cloud services," a TechCrunch report mentioned.
OYO has aggressively been expanding its operations to several markets including Southeast Asia, Europe and the US in recent years.
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