OYO reveals numbers to show that the cash burn had reduced sharply even before the mass layoffs

• OYO said its consolidated revenue stood at $951 million, which is an almost five times jump from its numbers last year.
• Its India specific losses fell from 24% to 14% to $83 million.
• The numbers may give OYO and its investors some confidence but the real challenge remains.
• OYO has to revive its brand after a series of complaints from hotel owners and consumers alike.

Indian hospitality unicorn OYO says that its revenue grew more than four times in the year ending March 2019 and the cash burn had reduced significantly to 14% from 24% a year earlier. This, even before the company had laid off thousands of employees and started cutting costs to focus on profitability.

OYO said its consolidated revenue stood at $951 million, which is an almost five times jump from the $211 million a year earlier. Later today, board member Aditya Ghosh will be addressing a conference call to explain the numbers.

A creaking $10-billion edifice

In November, a valuation report on OYO’s financials showed that the company has reported a loss of ₹2,384.7 crore, almost six times higher than its losses a year earlier. However, according to OYO, this is largely because of the expansion in China in the second half of 2018.

The losses attributable to India had fallen from 24% of revenue in March 2018 to 14% of revenue in March 2019 and stood at $83 million. Its global losses stood at $335 million.

At the same time, founder Ritesh Aggarwal bought back shares from existing investors at a higher price boosting valuation to $10 billion. The propping up of valuation, amid mounting losses, raised a few eyebrows.


OYO’s India business is over half a billion dollars

OYO makes nearly two-thirds of its revenue, 63.5% to be precise, from India amounting to $604 million. The company also said that over 90% revenue came from organic users (those who book directly on OYO website or app). Returning customers on the OYO platforms make for 73% of the India revenue.

The numbers may give OYO and its investors some confidence but the real challenge remains. A series of complaints from hotel owners and consumers, and a tax search at the company headquarters in Gurgaon had hurt the brand in a big way in the last few months.

Now, the Softbank-backed startup is looking to revive its image and assure both investors and its customers that all is well. “The company’s increased focus on corporate governance and building a high-performing and employee-first work culture will also drive this next phase of sustainable growth for us,” said Abhishek Gupta, Global CFO of OYO Hotels & Homes.

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