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Oyo hotels has about USD 1 billion to fund operations until IPO, says founder Ritesh Agarwal

Wednesday, December 2, 2020, 10:00 Hrs  [IST]

According to Money Control, Oyo Hotels is making progress in recovering from the COVID-19 pandemic fallout and has about USD 1 billion to fund operations until an initial public offering (IPO), CEO and founder Ritesh Agarwal has told employees.

The 27-year-old founder of the startup, which has endured months of layoffs amid economic losses as the pandemic hammered its business, made the comments in a fireside chat with Oyo board member Troy Alstead.

He said his firm's focus is on getting revenue for per available room to 60-80 percent of pre-pandemic levels across all markets. He said India, China, Japan, and Southeast Asia are making progress in reaching that range.

"We are still not at the best place, a lot more work to be done. We continue to hold close to a billion dollars of cash, including all our group companies," 

Alstead, former COO of Starbucks Corp., is a independent director on Oyo's board, which also has Gerry Lopez and Munish Varma of SoftBank as members.

Earlier, SoftBank founder Masayoshi Son encouraged and financed Oyo's expansion, which led to operational missteps and soured partnerships. Following this, the Indian startup ended up laying off or furloughing thousands of employees.

Despite these layoffs, Agarwal noted that he had not felt pressure from outside shareholders. He opined that investors have "very strong" representation on the board. Agarwal has also borrowed $2 billion to buy shares in his own firm.

"Our management’s focus is to make sure that we have a well designed, IPO-ready company, available for our shareholders and board members to make the right decision," Agarwal added.

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