Oyo raises $5 million from Microsoft at $9.6 billion valuation

Global travel technology firm Oyo has raised $5 million from Microsoft at a valuation of $9.6 billion, the firm said in a regulatory filing.

At the July 16 extraordinary general meeting of Oravel Stays Pvt Ltd (Oyo), the parent company of Oyo, the issue of equity shares and Series F2 compulsory convertible cumulative preference shares (Series F2 CCCPS) was approved for "an aggregate consideration amounting to the rupee equivalent of $4,971,650 to Microsoft Corporation on a private placement basis", as per a Registrar of Companies (RoC) filing.

Under the deal with technology giant Microsoft, Oyo will issue 5 equity shares of the face value of Rs 10 each for cash at an issue price amounting to the India rupee equivalent of $58,490 per equity share, according to the filing.

The company is aiming to transform itself to a global full-stack technology provider for small and mid-sized hotels and homes.

Oyo said on Friday it is going to hire over 300 technology professionals over the next six months, in profiles including software development, engineering and product managers, designers, data scientists across entry-level to senior leadership roles.

It said it will hire full-stack teams with key skill sets and expertise in the areas of machine learning, data engineering and information security, Android and iOS developers.

The expanded design, product and engineering teams will be responsible for building long-term capabilities for Oyo from scratch and update the current tech capabilities. The travel technology player is set to introduce several innovations and commit to investments in technology, further optimising revenues for hotel owners, while improving user experience for customers.

As Oyo leads with tech and product innovations for growth, the company is also actively considering bringing back ex-Oyopreneurs from its technology team.  

It has rolled out comprehensive pay packages, a combination of fixed pay, bonuses & stock options, for all, including freshers. In a constantly evolving technology space, the company provides upskilling opportunities for employees through several internal development programmes, the company said in a statement.

In July, Oyo had announced raising term loan B (TLB) funding of $660 million from global institutional investors to be utilised for paring debt and other business investments.

"TLB is used in the lending market to refer to a tranche of senior secured credit facilities made available to a borrower that is designed to be syndicated in the institutional loan market. These are typically floating-rate term facilities with an actual or implied non-investment grade rating, a maturity of five to seven years and a nominal (1% per year) or no amortisation, with the remaining principal due in a bullet repayment at maturity," explains LexisNexis Legal & Professional, UK, a global provider of legal, regulatory, business information & analytics.