MyPreferred Transformation And Hospitality Pvt. Ltd, a joint venture between Oyo Hotels & Homes and Japanese conglomerate SoftBank, has raised Rs 50 crore (approximately $6.97 million at current exchange rates) in debt financing from non-banking financial company Avendus Finance.
Oyo will use the capital to strengthen the design quality of living spaces for its hotel assets in India, the company said in a press statement.
Meenakshi Rajpal Mehta, vice-president for financial services at Oyo, said the firm is happy that Avendus Finance has shown confidence in the fundamentals of the business and the untapped hospitality potential of the Indian market.
VCCircle has reached out to Oyo on the details of the financing and will update this report accordingly.
MyPreferred, which was set up as a JV between Oyo and the SoftBank-controlled SB Topaz last year, focusses on conducting repairs and refurbishments of Oyo hotels and other assets across markets in India and South Asia.
Avendus Finance, which was founded in 2016, is the credit solutions provisions arm of the Indian financial services firm Avendus Capital. The financier provides services such as growth funding, promoter financing, and corporate financing solutions.
Other firms that Avendus Finance has funded include the Krishna Institute of Medical Sciences (Rs 60 crore), Rao Edusolutions Pvt. Ltd (Rs 55 crore), International Asset Reconstruction Company Pvt. Ltd (Rs 90 crore), and Ad2Pro Group (Rs 63 crore), according to its website.
Oyo, founded by Ritesh Agarwal, who is also the CEO of the firm, in 2013. The company is one of the most heavily funded companies in the Indian startup ecosystem, with investors in the firm including SoftBank, Lightspeed Venture Partners, DSG Consumer Partners, Innoven Capital, Airbnb, and Sequoia Capital.
Last month, it was reported that the startup would raise $1.5 billion (around Rs 10,651 crore) in a Series F funding round from Agarwal and other existing investors, with the former expected to invest around $700 million of that amount.
That development came after Agarwal in July said that he would deploy around $2 billion to raise his stake in the hospitality platform by subscribing to fresh equity and share buybacks from existing stakeholders. At the time, Oyo said Agarwal would conduct the transaction through RA Hospitality Holdings (Cayman). As part of that plan, Lightspeed and Sequoia were expected to sell part of their stake in Oyo.
Prior to that, in February, the company raised $100 million (around Rs 709.4 crore) from Chinese ride-hailing giant Didi Chuxing to close a $1 billion investment round. As part of that capital exercise, Oyo raised $800 million in September last year from SoftBank, Lightspeed, Sequoia, and Greenoaks Capital.
The remaining $100 million in the round was raised from the Singapore-based transportation network company Grab that December. Interestingly, both Didi Chuxing and Grab have received massive investments from SoftBank in the past.
Apart from India, the company also operates in several international markets, including China, Malaysia, the United Kingdom, the United Arab Emirates, and Indonesia.