As per TechCrunch, the SoftBank-backed Indian hotel chain Oyo is about to find a new investor – Microsoft.
People familiar with the matter said a deal between these two can be closed by Friday and may involve Oyo shifting its infrastructure to Microsoft’s cloud services as a part of the deal.
Microsoft to Acquire Stake in Oyo
Oyo, the budget hotel chain hailing from India, is reportedly in advanced talks with Microsoft, the American software giant which earlier acquired a handful of Indian startups.
As per TechCrunch, the advanced talks may be finalized as soon as Friday, where Microsoft may acquire a part of Oyo’s $9 billion valuations. The company was valued at over $10 billion in 2020 but was hit hard by the COVID-19 pandemic.
Since the travel ban, many hotels, including the Oyo rooms, were closed, causing losses to the SoftBank-backed startup. Apart from wiping out a part of its valuation, Oyo has fired thousands of employees earlier this year.
While it’s hopefully recovering the losses now with the slow restart of tourism after the pandemic, there’s a lot Oyo should work out. The company has a bad reputation with many hotel owners it partnered with, and it promised to solve them soon.
Amidst this, there are reports that Oyo is planning for an IPO in the Indian stock market and also raised $660 million to pay off the previous debt. So with Microsoft’s hand, Oyo may recover all the losses and get better guidance too.
While the amount of deal isn’t known yet, Microsoft may bring Oyo’s infrastructure onto its cloud service as per the deal, a person familiar with the matter said to TechCrunch.
Microsoft’s earlier investments in Indian startups include e-commerce platform Flipkart, online news aggregator DailyHunt, and a logistics SaaS firm named FarEye.