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It, the Indian startup renowned for its budget hotel offerings, is currently navigating turbulent waters as it seeks to secure additional funding. Once valued at a staggering $10 billion in 2019, recent reports indicate that OYO’s valuation could plummet to around $3 billion or even lower during its current funding discussions. This drastic drop reflects the challenges the company faces in a competitive market and evolving investor sentiment.

The company is actively engaging with various investors, including Malaysia’s Khazanah, to explore new financing options. There’s also the potential for secondary transactions, which could further depress It’s valuation, possibly down to $2.5 billion. Such a decline would be significant, especially considering that it falls below the total capital It has raised through both equity and debt over the years.

It’s journey to a $10 billion valuation in 2019 was marked by rapid expansion and aggressive marketing strategies. The company quickly became a dominant player in the hospitality sector, leveraging technology to streamline hotel operations and enhance customer experience. However, this impressive growth was not without its challenges. The COVID-19 pandemic severely impacted the travel and hospitality industries, leading to a reevaluation of many companies, including OYO.

It still enjoys backing from notable investors such as SoftBank and Airbnb. Despite the recent rumors about a potential drop in valuation, these investors have refuted claims that concrete plans for transactions or value alterations are currently in play. This assertion comes amidst OYO’s decision to withdraw its draft red herring prospectus for an initial public offering (IPO) for the second time. Initially, It aimed to raise around $1.2 billion in 2021 at a projected $12 billion valuation.