Last Updated on 30/07/2021 by Riya
After facing a huge loss in hotel business due to the lockdown in India finally, the good days came back for the hotel booking app as the California headquartered tech giant Microsoft is in the final stage of talks with the company to buy stakes in Oyo. Oyo was estimated at over $10 billion in 2019, yet one of its big shareholders recently significantly reduced the Indian startup’s worth to $3 billion.
Due to the significant financial loss the company had to take debts to run its business, a person familiar with the company also claimed Oyo had to loan $660 million in order to recompense the previous debt taken by the company. The hotel booking app has currently backed by 5 big investors including SoftBank Vision Fund, Sequoia Capital, Lightspeed Ventures, Airbnb, and Hero Enterprises.
However, it is not the first investment made by Microsoft in India as before this investment the company had also backed news portal DailyHunt, e-commerce store Flipkart, and logistics SaaS firm FarEye. According to the sources, the company is planning to invest $9 billion in Oyo to buy its stakes. Although, it is just an assumption the exact portion of the investment is not yet confirmed by the company. However, it is speculated that presently Microsoft intends to purchase only a small amount of stake in the company although later the company might buy the ownership of Oyo.
If the deal is materialized then the funds will be used by Oyo to widen its technology and grasp more share holdings amid Covid19. Furthermore, after this investment Oyo can also be leveraged from Microsoft’s cloud services, as per the sources. Although, Microsoft and Oyo have yet to confirm the news regarding the investment.