Microsoft does a $9 Bn Strategic Investment in OYO.

According to sources, US-based software giant Microsoft has completed a strategic investment in SoftBank-backed OYO Hotels & Homes for an unknown amount as the business prepares for a prospective IPO.

According to ET, OYO, which SoftBank Vision Fund supports, Sequoia Capital, Lightspeed Ventures, Airbnb, and Hero Enterprise, was valued at roughly $9 billion during this round.

Microsoft is said to be purchasing a minor part of the company right now, with the possibility to increase ownership later. The investment comes after the hospitality startup reported earlier this month that it had raised $660 million in term loan B (TLB) capital from worldwide institutional investors. This offer was 1.7 times oversubscribed.

Before the TLB funding, OYO became the first Indian startup to be rated by foreign rating agencies Fitch and Moody’s. It had also earlier stated that its India company had turned EBITDA positive before the second wave began.

OYO is expected to use the investment to scale up its technological play and gain a more significant market share, as disclosed during the TLB round, at a time when the hospitality industry is still struggling to recover from the Covid-19 outbreak.

The revelation also comes at a time when a spate of prominent Indian firms, including Nazara Games, Zomato, Paytm, Nykaa, Ola, CarTrade, and MobiKwik, have gone public or are about to go public. The remarkable debut of restaurant aggregator Zomato on the stock exchanges, with a valuation of INR 1 trillion, has encouraged numerous firms to reconsider their IPO plans.

Microsoft Has Been Growing Its India Presence & Investments

Since 2019, Microsoft has been investing in India through its venture fund M12, and its India office opened in June 2020. According to the press release, the fund will focus on local and cross-border solutions across B2B software firms in the fields of applied artificial intelligence, business applications, infrastructure, security, and vanguard technologies. M12, which bills itself as a founder-focused fund, was launched in 2016 and has invested in 200 firms, including Noida-based healthcare unicorn Innovaccer, news aggregation Dailyhunt, and FarEye, a logistics management startup based in New Delhi. Microsoft has also made a significant investment in Flipkart, the largest e-commerce company in India.

Last year, Microsoft was said to be considering a strategic investment in Mukesh Ambani’s digital platform Jio Platforms. In August 2019, Microsoft and Reliance announced a partnership to provide free Reliance Jio connectivity and Microsoft Azure cloud services to Indian digital startups and small and medium businesses.