IPO-bound hospitality unicorn OYO witnessed a 34% decrease in its net loss to INR 1,286.5 Cr during the financial year 2022-23 (FY23), down from INR 1,941.5 Cr. This reduction occurred despite marginal declines in expenses, all while the business continued to grow.
The startup supported by SoftBank experienced a 14% increase in its operating revenue, rising to INR 5,463.9 Cr in FY23, compared to INR 4,781.3 Cr in the preceding fiscal year. The primary sources of revenue include earnings from accommodation service sales, commissions from bookings, and subscription fees.
Taking into account other sources of income, the total revenue similarly surged by 14%, reaching INR 5,601.7 Cr in FY23, up from INR 4,904.7 Cr in FY22.
Established in 2012 by Ritesh Agarwal, OYO provides a diverse range of accommodations, including vacation homes, casino hotels, coworking spaces, budget hotels, corporate lodging, and more.
The startup, which was valued at approximately $9 billion in its last assessment, successfully trimmed its expenses in the year under consideration, even as its business expanded. The total expenditure decreased by 3%, dropping to INR 6,799.6 Cr from INR 6,985.3 Cr in the preceding fiscal year.
The hospitality unicorn allocated INR 1,548 Cr toward employee benefit expenses in FY23, marking a 17% reduction from the INR 1,861.7 Cr spent in the previous fiscal year. It is worth mentioning that OYO underwent a restructuring effort during FY23, resulting in the layoff of approximately 600 employees.
OYO’s expenses associated with leases, comprising both the service component of the lease and lease rentals, increased by 10% to INR 2,843 Cr in FY23, up from INR 2,578 Cr in the preceding year.
OYO’s marketing expenses reduced by 17% to INR 154.8 Cr in FY23, down from INR 1,861.7 Cr in FY22.
Having joined the unicorn club in 2018, OYO has secured more than $3 billion in funding thus far. Notable investors in OYO include Microsoft, Airbnb, and Peak XV Partners.
According to an internal email accessed, OYO was on track to report its first-ever profitable quarter in the second quarter of FY24, with a projected profit of INR 16 Cr. Earlier, the startup told its employees that it posted an adjusted EBITDA of about INR 175 Cr in Q1 FY24.
At present, the startup is actively seeking to secure $250 million from investors, given the postponement of its initial public offering (IPO). A significant portion of this funding will be earmarked for the purpose of retiring its $660 million term loan B.
Earlier this year, the startup chose a confidential route to pre-file its draft documents for its public offering and downsized its IPO to a range of INR 3,286 Cr to INR 4,929 Cr ($400 million to $600 million).