Softbank-backed OYO is in talks with InCred, a financial company, to raise money from family offices, as per a report by The Arc.
The hospitality start-up is seeking to raise $80-90 million from family offices. Starting at $2 million each, the company is also willing to accept commitments starting at $2 million for each, according to the report.
Read: OYO Withdraws DRHP, to Refile IPO Post Refinancing
An ultra-high-net-worth individual's (HNWI) private wealth management advisory firm is called a family office. Family offices provide a comprehensive solution for managing an affluent individual's or family's financial and investing needs, setting them apart from standard wealth management businesses, as per Investopedia.
As per the report, InCred arranged a call with the CEO and founder of Oyo, Ritesh Agrwal, where nearly 100 investors were present. While most of the capital will go toward growing the business, the rest will be used to pay off Oyo's debt.
While the name has not been revealed, the management of Oyo has indicated that half of its target $150 million will come from a sovereign fund, according to the report. In January, Bloomberg reported that the sovereign wealth fund of Malaysia, Khazanah Nasional Berhad, is in talks to spearhead an Oyo $400 million fundraising round.
The report says that the fundraising is occurring at a valuation of $2.3 billion, which is 80 per cent lower than OYO's peak valuation of $10 billion in 2019. In 2022, SoftBank reduced the valuation to $2.7 billion. However, in replying to The Arc about the fundraise, Oyo called this information incorrect and emphasized that they are focusing on refinancing their outstanding debt, which will help improve the company’s profitability.
Oyo has already withdrawn its IPO papers and is expected to refile its highly anticipated initial public offering (IPO) as it approaches the completion of refinancing plans to earn up to USD 450 million through the issuing of dollar bonds.
