Thu. Mar 28th, 2024
10 successful SoftBank investments in India10 successful SoftBank investments in India

Ritesh Agarwal, founder of India’s largest hospitality chain Oyo, along with the largest minority investors of the company have put in a clause that SoftBank cannot increase its shareholding in the company beyond 50 per cent without both their approvals, reported ET.

The clause was introduced in Oyo’s Articles of Association (AoA) when it raised a round of $250 million led by SoftBank in late 2017 but has not been reported before. 

The deal will protect Oyo’s early backers, top US venture capital firms Lightspeed Venture Partners and Sequoia Capital India, besides founder Agarwal, and also help restrict a potential secondary transfer of shares in the company to SoftBank.

This comes at a time when Oyo has been looking to raise a new round at a valuation of over $10 billion, where it is looking to get a new investor to lead it. SoftBank currently holds 46 per cent in Oyo.

The SoftBank backed hospitality chain Oyo was started by Ritesh Agarwal in 2013. The startup was started from a single hotel to over 8500 hotels at present. It is the fastest growing network of hotels, offline and online and the current evaluation is over $400 million.

Named as “SoftBank Standstill Obligation”, the clause, specifically, requires that the Japanese telecom and internet major restrict its shareholding in the company to 49.99 per cent.

While, other hospitality startups, which are emerging at a fast pace in India includes  YatraFabhotelsTreeboMakeMyTripClearTrip, etc.

Also read: Oyo steps into Vietnam market with over 90 hotels in six cities

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